Recently, the Nigerian Securities and Exchange Commission (SEC) has given the green light to two local crypto exchanges, Busha Digital Limited and Quidax, to operate under the Accelerated Regulatory Incubation Program (ARIP). This Approval-in-Principle marks a significant step towards complying with upcoming regulations on virtual asset service providers, set to be released in May 2022.
The SEC’s decision to grant Approval-in-Principle to these exchanges reflects the regulator’s commitment to promoting innovation while ensuring investor protection in the digital asset space. By setting the stage for operational firms to enter the market with transparency and appropriate protection measures in place, the SEC is taking proactive steps to safeguard the interests of crypto users.
Michael Adeyeri, the CEO of Busha, emphasized the importance of this approval in cleansing the crypto space for the benefit of the Nigerian economy. With the approval in place, local crypto users will have access to secure and regulated platforms for managing and trading crypto-assets. This move is not only positive for investors but also contributes to the overall growth and stability of the digital asset market in Nigeria.
Regulatory Actions and Global Exchanges
While local exchanges are receiving approval to operate, the Nigerian authorities have been cracking down on global exchanges like 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 tightening of regulations underscores the SEC’s commitment to ensuring that all crypto exchanges, whether local or global, adhere to the same standards of compliance and investor protection.
Expansion of Regulatory Incubation Program
Apart from Busha and Quidax, five other firms have been admitted under Nigeria’s Regulatory Incubation (RI) program. This program serves as a platform for evaluating the business models of digital asset firms and testing innovative products in a controlled environment. The inclusion of firms like Trovotech, Wrapped CBDC, HousingExchange.NG, Dream City Capital, and Blockvault Custodian demonstrates the SEC’s dedication to nurturing a diverse ecosystem of digital asset providers in the country.
The SEC has made it clear that the ARIP and RI programs are the only legitimate pathways for well-intentioned entities to introduce their products to the Nigerian capital market. By enforcing these programs, the regulator aims to create a level playing field for all participants while upholding the highest standards of transparency, protection, and innovation in the digital asset space.
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