Nigeria’s Securities and Exchange Commission (SEC) said it has granted approval in principle to two crypto exchanges Quidax and Busha, giving them the status of legally recognized crypto trading platforms in the country.
The two exchanges were approved under the Commission’s Accelerated Regulatory Incubation Program (ARIP).
In addition to that, the Commission said it has also allowed four companies to test their models and technology under its Regulatory Incubation (RI) Program.
The four firms are digital asset offering platforms, which include Trovotech Ltd, Wrapped CBDC Ltd, Dream City Capital and HousingExhange.NG Ltd.
The SEC announced the development via a statement Thursday, and the firms named are not the only entities that have applied for the ARIP and RI program. It added that other applications received that are being evaluated will be granted approval on a case-by-case basis as they meet all SEC requirements.
Legal recognition for crypto trading
While noting that the referred Approvals-in-Principle are a precursor to the granting of full registration by the SEC, the Commission emphasized the legal status of the companies as crypto trading platforms in Nigeria.
“The SEC is using this medium to reiterate that only approved digital exchanges and platforms are legally authorized to transact crypto trading business in any form in Nigeria.
“In this regard, ARIP and RI remain the only avenues for well-intentioned entities to legally introduce their digital products and services to the Nigerian capital market.
“The public is strongly advised to refrain from doing business with illegal operators who have not applied for and received the SEC’s approval under the ARIP or RI program.
“Prospective investors are also reminded to always confirm from the various SEC information portals whether entities purporting to provide investment services are legally authorized to do so.” informed the Commission.
Back story
It should be recalled that the SEC introduced the ARIP to strategically incorporated firms that had commenced their activities prior to the publication of the rules on virtual asset providers in May 2022.
- This was in response to several calls from stakeholders on the need to regulate crypto trading in the country.
- Conversely, the RI program was created to assess the business models of Digital Assets companies and test innovative products, services and technology in a real-time market environment under the close supervision of the SEC.
- The SEC said the first set of approved companies are to test their regulatory model, adding that the outcome of the process will inform further policy development in the crypto space in Nigeria.
What you should know
Despite the Nigerian authorities’ negative stance on crypto trading, many Nigerians have continued to trade in digital assets.
Several reports on global crypto trading have recognized Nigeria as one of the top cryptocurrency trading countries worldwide.
- Meanwhile, stakeholders in the blockchain space in Nigeria has blamed the recent controversy surrounding the operations of crypto exchanges and the alleged manipulation of the Nigerian currency through peer-to-peer (P2P) crypto trading on the policies and actions of the Central Bank of Nigeria (CBN), which tends to take distance. the regulator from the market.
- According to them, the banking regulator’s stance opened the doors for bad actors who were involved in currency manipulation through crypto trading.
- The activities of the bad actors are believed to tarnish the image of several legitimate actors in the industry.
