In recent news, the Nigerian Securities and Exchange Commission (SEC) has made significant strides in granting Approval-in-Principle to two local crypto exchanges, Busha Digital Limited and Quidax. This approval falls under the Accelerated Regulatory Incubation Program (ARIP), which aims to onboard operational firms ahead of the upcoming release of the Rules on Virtual Asset Service Providers in May 2022. This move by the SEC showcases their commitment to fostering innovation while prioritizing investor protection within the digital asset space.
The Approval-in-Principle granted by the SEC serves as a precursor to the full registration of these exchanges. It is intended to ensure that proper protection and transparency measures are in place for each product or service offered by these firms. Busha CEO Michael Adeyeri emphasized the importance of this approval, stating that it is a crucial step in sanitizing the space for the benefit of the economy. He also highlighted how Nigerian crypto users will now have access to safe and moderated local venues for managing and trading crypto-assets.
As local exchanges like Busha Digital Limited and Quidax receive licensing approval, there has been a simultaneous crackdown on global exchanges such as Binance and OKX by Nigerian authorities. Legal actions have been taken against Binance, and OKX was forced to exit the region due to non-compliance with local regulations. In contrast, the SEC announced the admission of five other firms under Nigeria’s Regulatory Incubation (RI) program. This program aims to evaluate the business models of digital asset firms and test innovative products within a controlled environment.
The firms registered under the RI program include a diverse range of players in the crypto space, such as blockchain platform Trovotech, Nigerian stablecoin provider Wrapped CBDC, real-estate token platform HousingExchange.NG, digital real-estate investment firm Dream City Capital, and custodial service provider Blockvault Custodian. The SEC reaffirmed that the ARIP and RI programs are the legitimate avenues for well-intentioned entities to introduce their products to the Nigerian capital market, signaling a growing landscape of opportunities for crypto innovation in the country.
The recent developments within the Nigerian crypto exchange landscape reflect a dynamic shift towards regulatory clarity and innovation. With the SEC’s proactive approach to fostering a safe and transparent environment for digital asset activities, local and global players alike are navigating a rapidly evolving market with increased opportunities for growth and compliance.