SEC grants approval in principle to Quidax, Busha and 5 other Nigerian crypto exchanges

The Nigeria Securities and Exchange Commission (SEC) has announced that seven crypto entities have been granted an ‘Approval-in-Principle.” These crypto companies include Quidax Technologies Company and Busha Digital Limited, according to a statement on the SEC’s website on Thursday.

The regulator which oversees registration and operations in the capital markets, said two Digital Assets Exchanges have been granted “Approval-in-Principle” to commence operation under the Accelerated Regulatory Incubation Program (ARIP). Also, 5 firms have been admitted to test their models and technology under the SEC’s Regulatory Incubation (RI) Program.

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Notably, the SEC under its new Director-General, Emomotimi Agama has shown signs of willingness to collaborate with local crypto companies, despite the protracted clampdown on major crypto exchanges like Binance and OKX. Recall that last week, the SEC chief said in a conversation with Bloomberg that crypto companies licensing can come sooner than expected.

SEC grants licenses to Quidax, Busha, and others

In June, the SEC introduced ARIP in order to on-board firms which had commenced operations prior to the release of the Rules on Virtual Asset Service Providers in May 2022. On the other hand, the RI Program was created to assess the business models of Digital Assets firms.

Now, these approvals were made in furtherance of its commitment to enabling innovation that would deepen the capital market while guaranteeing the protection of investors, according to the body. Two Digital Assets Exchanges, Busha Digital Limited and Quidax Technologies Limited were granted “Approval-in-Principle” to commence operation under ARIP. 

On the flip side, five firms – Trovotech Ltd, Wrapped CBDC Ltd, Housing Exchange.NG Ltd, Dream City Capital, Blockvault Custodian Ltd (all Digital Assets Offering Platforms bar BlockVault which is a Digital Asset Custodian) have been admitted to test their models and technology under the SEC’s RI Program.

The SEC stated that the referenced Approvals-in-Principle are a precursor to the grant of full registration by the SEC and are meant to ensure that appropriate protection and transparency are in place with respect to each product or service. Adding that the outcome of the process would inform further policy development in this space.  

“Tests would be conducted on a short-term and small-scale basis and the SEC would continue to work with the participating firms to agree on testing parameters as well as robust consumer safeguards.” The statement said.

Additionally, the body emphasized that the mentioned crypto entities are not the only companies that have applied to ARIP and the RI Program. There are other applications that have been received, being assessed and would be granted Approval-in-Principle on a case-by-case basis as they meet requirements.

Importantly, the SEC stressed 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.”

In conclusion, the body advised the public 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.”

Also, intending investors are to confirm from the various SEC information portals whether entities purporting to provide investment services are legally empowered to do so, the statement concluded.

Crypto in Nigeria 

A circular released in June by the SEC listed establishing an office in Nigeria as part of the eligibility requirements for companies categorised as Virtual Assets Service Providers (VASPs) in the country. 

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The ARIP framework applies to virtual asset service providers and token issuers that carry on business activities in Nigeria or offer services to Nigerian consumers including platforms that facilitate the offering, trading, exchange, custody and transfer of virtual/digital assets. 

Despite what can be branded as progress from the SEC, the continued clampdown on Binance and incarceration of the company executive, Tigran Gambaryan, cast a shadow over the prospect of crypto regulation in Nigeria. Tigran has now spent six much in detainment and there are growing concerns over his health and wellbeing.