Nigeria’s Securities and Exchange Commission (SEC) said it has granted an Approval-in-Principle to two crypto exchanges Quidax and Busha, giving them the status of legally recognised crypto trading platforms in the country.
The two exchanges were approved under the Accelerated Regulatory Incubation Program (ARIP) program of the Commission.
In addition to that, the Commission said it has also admitted four companies to test their models and technology under its Regulatory Incubation (RI) Program.
The four firms are digital assets offering platforms, which include Trovotech Ltd, Wrapped CBDC Ltd, Dream City Capital, and HousingExhange.NG Ltd.
Announcing the development via a statement on Thursday, the SEC the listed above firms are not the only entities that have applied to ARIP and the RI Program. It added that other applications received are being assessed would be granted Approval-in-Principle on a case-by-case basis as they meet all SEC requirements.
Legal recognition for crypto trading
While noting that the referenced Approvals-in-Principle is a precursor to the grant of full registration by the SEC, the Commission emphasized the legal status of the companies as crypto trading platforms in Nigeria.
“The SEC uses this medium to reiterate that only approved digital exchanges and platforms are legally authorized to carry out the business of crypto trading in any form in Nigeria.
“In this regard, the ARIP and RI remain the only avenues for well-intentioned entities to legitimately introduce their digital products and services to the Nigerian Capital market.
“The public is strongly advised to refrain from dealing with illegal operators who have not applied to and received the SEC’s approval under the ARIP or the RI Program.
“Intending investors are also reminded to always confirm from the various SEC information portals whether entities purporting to provide investment services are legally empowered to so do,” the Commission stated.
Backstory
It would be recalled that the SEC introduced the ARIP to strategically on-board firms that had commenced operations prior to the release of the Rules on Virtual Asset Service Providers in May 2022.
This was in response to several calls by 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 firms and test innovative products, services, and technology in a real-time market environment under close supervision by the SEC.
The SEC said the first set of companies approved are to test its regulatory model, adding that the outcome of the process would inform further policy development in the crypto space in Nigeria.
What you should know
Despite the negative posture of the Nigerian authorities to crypto trading, many Nigerians have continued to transact with digital assets.
Several reports on global crypto trading have recognised Nigeria as one of the top countries trading in cryptocurrencies all over the world.
Meanwhile, stakeholders in the blockchain space in Nigeria have blamed the recent controversy that surrounded 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 distance the regulator from the market.
According to them, the stance of the banking regulator opened the doors for bad actors, who were involved in currency manipulation through crypto trading.
The activities of the bad actors are believed to be denting the image of several legitimate players in the industry.
[Nairametrics]
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