The Nigerian Securities and Exchange Commission (SEC) recently made a significant announcement, 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 before the release of the Rules on Virtual Asset Service Providers in May 2022. The SEC’s decision signifies a commitment to fostering innovation while ensuring investor protection within the digital asset space.
Busha CEO Michael Adeyeri lauded the approval as “an overdue step to sanitize the space for the benefit of the economy.” He emphasized that this development would provide Nigerian crypto users with access to “safe and moderated local venues for managing and trading crypto-assets.” By having local exchanges officially recognized and regulated, users can transact with more confidence and security, thus boosting the overall cryptocurrency ecosystem in Nigeria.
The approval of Busha Digital Limited and Quidax comes amidst a backdrop of regulatory scrutiny towards global exchanges like Binance and OKX. The Nigerian government has taken legal action against Binance and compelled OKX to exit the region due to non-compliance with local regulations. This signals a shift towards tightening oversight and enforcing compliance within the cryptocurrency sector to protect investors and maintain market integrity.
In addition to the approval of the two local crypto exchanges, the SEC announced the admission of five other firms under Nigeria’s Regulatory Incubation (RI) program. This initiative aims to evaluate the business models of digital asset firms and test innovative products within a controlled environment. The firms admitted include Trovotech, Wrapped CBDC, HousingExchange.NG, Dream City Capital, and Blockvault Custodian. By providing a platform for these entities to operate under regulatory supervision, the SEC seeks to facilitate responsible innovation in the Nigerian capital market.
It is important to note that the SEC reiterated that the ARIP and RI programs are the sole legitimate pathways for “well-intentioned entities” to introduce their products to the Nigerian capital market. By adhering to the regulatory frameworks set forth by these programs, firms can demonstrate their commitment to transparency, consumer protection, and regulatory compliance, which are essential for building trust and credibility in the burgeoning cryptocurrency industry in Nigeria.
The SEC’s decision to grant Approval-in-Principle to local crypto exchanges and admit additional firms under the Regulatory Incubation program reflects a proactive approach towards regulating the digital asset space while fostering innovation. These developments are poised to shape the future landscape of cryptocurrency adoption and investment in Nigeria, providing a framework for responsible growth and development within the industry.
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