Nigeria Accepts Crypto, Grants Provisional Approval To Two Operators

Nigeria through the Securities and Exchange Commission (SEC) announced on Thursday that it has granted “Approval-in-Principle” to two digital asset exchanges under its Accelerated Regulatory Incubation Program (ARIP).

The Commission said the move aligns with its ongoing efforts to foster innovation in the capital market while ensuring investor protection.

The SEC identified the approved companies as Busha Digital Limited and Quidax Technologies Limited.

The Commission stated that the current cohort includes two digital asset exchanges, four digital asset offering platforms, and one digital asset custodian.

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According to the SEC: “Busha operates a digital exchange that facilitates the buying and selling of crypto assets using fiat currency. It allows individuals and businesses in Nigeria and other developing economies to access basic digital asset investment services. Through its mobile and web applications, Busha’s customers can buy, sell, store, send, receive, trade, invest, and make payments in cryptocurrencies.

“Quidax Technologies Limited operates a cryptocurrency trading platform in Nigeria. The platform leverages blockchain technology to list and trade already issued crypto tokens (assets). The exchange platform is available on both web and mobile for ease of access. Quidax also utilizes digital wallets to enable users to store, receive, and transact in a variety of cryptocurrencies.”

The SEC also disclosed that five firms have been admitted to test their models and technology under the SEC’s Regulatory Incubation Program (RI). These firms include Trovotech Ltd, Wrapped CBDC Ltd, HousingExchange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd.

Recently, the SEC introduced ARIP to strategically onboard firms that had begun operations before the release of the Rules on Virtual Asset Service Providers in May 2022. Conversely, the RI Program was established to evaluate the business models of digital assets firms and test innovative products, services, and technologies in a real-time market environment under close SEC supervision.

The SEC noted, “The current cohort of ARIP and the RI Program is characterized by the increased use of distributed ledger technology in creating and trading crypto assets. The outcome of these tests will inform further policy development in this space. Testing will be conducted on a short-term, small-scale basis, with the SEC continuing to work closely with participating firms to agree on testing parameters and implement robust consumer safeguards.”

The Commission further explained that these Approvals-in-Principle are precursors to full registration by the SEC, designed to ensure that appropriate protections and transparency are in place for each product or service.

The SEC also highlighted that the aforementioned firms are not the only entities that have applied to the ARIP and RI Program.

Other applications are currently under review and will be granted Approval-in-Principle as they meet all SEC requirements, it stated

The SEC reiterated that only approved digital exchanges and platforms are legally authorized to conduct crypto trading in any form in Nigeria.

“The ARIP and RI Programs remain the exclusive avenues for legitimate entities to introduce their digital products and services to the Nigerian capital market”, it added.

The Commission advised the public to avoid dealing with illegal operators who have not received SEC approval under the ARIP or RI Program.