The Securities and Exchange Commission (SEC) of Nigeria has granted “approval-in-principle” to two digital asset exchanges, Busha Digital Limited and Quidax Technologies Limited, to operate under its Accelerated Regulatory Incubation Programme (ARIP). This move aims to foster innovation in the capital market while ensuring investor protection.
Announced in Abuja on Thursday, this approval is part of the SEC’s efforts to regulate and supervise the emerging digital asset sector. The SEC’s ARIP, along with the Regulatory Incubation Programme (RI), is designed to assess the business models of digital asset firms and test new products and services in a controlled environment.
Companies Approved and Their Operations:
- Busha Digital Limited: Busha operates a digital exchange that facilitates the buying and selling of cryptocurrencies using fiat currency. The platform allows individuals and businesses in Nigeria and other developing economies to access digital asset investment services through mobile and web applications. Users can buy, sell, store, trade, and make payments in various cryptocurrencies.
- Quidax Technologies Limited: Quidax is a cryptocurrency trading platform that leverages blockchain technology to list and trade existing crypto tokens. The platform is accessible via both web and mobile applications, providing users with a digital wallet to store and transact in multiple cryptocurrencies.
Expansion of the Regulatory Programs:
The SEC has also admitted five additional firms to test their models under the RI Programme. These firms include Trovotech Ltd, Wrapped CBDC Ltd, HousingExchange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd. The RI Programme allows these companies to experiment with innovative digital asset technologies and business models under the close supervision of the SEC, ensuring consumer safeguards are in place.
The SEC’s ARIP and RI Programmes were introduced to regulate firms that were operating prior to the release of the Rules on Virtual Asset Service Providers in May 2022. These initiatives aim to inform future policy development by testing new digital asset services in real-time market conditions.
Investor Protection and Market Integrity:
The SEC emphasized that the approval-in-principle is a preliminary step towards full registration and is intended to ensure adequate protection and transparency in each digital asset product or service. The Commission also warned the public against dealing with unapproved operators, advising investors to verify the legitimacy of any investment service providers through the SEC’s official channels.
These measures mark a significant step in Nigeria’s approach to digital asset regulation, aiming to balance innovation in the financial sector with the need to protect investors and maintain market stability.
