The Nigerian Securities and Exchange Commission (SEC) recently announced that two local crypto exchanges, Busha Digital Limited and Quidax, have received an “Approval-in-Principle” to start operating under the Accelerated Regulatory Incubation Program (ARIP). This initiative was created to onboard operational firms before the release of the Rules on Virtual Asset Service Providers in May 2022, showcasing the SEC’s dedication to fostering innovation while protecting investors in the digital asset space.
The regulatory approval granted to Busha Digital Limited and Quidax signifies a pivotal step towards establishing a safer and more transparent environment for crypto trading in Nigeria. By ensuring that appropriate protection and transparency measures are in place for each product or service offered, the SEC aims to enhance investor confidence and promote responsible market practices within the burgeoning crypto industry.
Busha CEO Michael Adeyeri expressed his appreciation for the approval, highlighting its importance in sanitizing the crypto space for the benefit of the economy. This regulatory green light will enable Nigerian crypto users to access secure and regulated local platforms for managing and trading digital assets, offering them a much-needed sense of security and peace of mind.
While local exchanges like Busha and Quidax continue to receive regulatory approval, the Nigerian government has simultaneously intensified its crackdown on global exchanges such as Binance and OKX. Legal actions have been taken against Binance, and OKX has been forced to exit the region due to non-compliance with local regulations. This crackdown underscores the importance of adhering to regulatory guidelines to operate in the Nigerian market.
Expansion of Regulatory Incubation Programs
In addition to Busha and Quidax, five other firms have been admitted under Nigeria’s Regulatory Incubation (RI) program. This program is designed to evaluate the business models of digital asset firms and test innovative products in a controlled environment. The newly registered firms include 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’s ARIP and RI programs stand as the legitimate avenues for well-intentioned entities to introduce their products to the Nigerian capital market. By obtaining regulatory approval through these programs, crypto exchanges and other digital asset firms can not only operate within the legal framework but also contribute to the growth and development of the Nigerian crypto ecosystem in a responsible and sustainable manner.