SEC grants 2 crypto firms ‘Approval in Principle’

The Exchange Commission has granted “Approval-in-Principle” to two Digital Asset Exchanges to begin operations under its Accelerated Regulatory Incubation Program (ARIP).

The companies that received these approvals are Busha Digital Limited and Quidax Technologies Limited.

In a statement released yesterday in Abuja, the Commission also announced that five additional firms have been admitted to test their models and technology under the SEC’s Regulatory Incubation (RI) program.

These companies include Trovotech Ltd, Wrapped CBDC Ltd, HousingExchange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd.

The Commission explained that this cohort consists of two Digital Asset Exchanges, four Digital Asset Offering Platforms, and one Digital Asset Custodian.

According to the statement, “Busha operates a digital exchange that allows users to buy and sell crypto assets using fiat currency.

Busha’s customers can use the mobile and web applications to buy, sell, store, send, receive, trade, invest, and make payments in cryptocurrencies.

“Quidax Technologies Limited runs a cryptocurrency trading platform in Nigeria that uses blockchain technology to list and trade pre-existing crypto tokens (assets).

The services are delivered through a proprietary blockchain owned and managed by Quidax.

The platform is accessible via both web and mobile, and Quidax also offers a digital wallet for users to store, receive, and transact in various cryptocurrencies.”

The SEC recently introduced the ARIP to strategically onboard firms that had begun operations before the release of the Rules on Virtual Asset Service Providers in May 2022.

In contrast, the RI program was designed to evaluate the business models of Digital Asset firms and test innovative products, services, and technology in a real-time market environment under close SEC supervision.

The Commission stated, “The current cohort of the ARIP and RI programs is marked by increased use of distributed ledger technology (DLT) in creating and trading crypto assets.

The results of these tests will guide further policy development in this area.”

Tests will be conducted on a short-term and small-scale basis, with the SEC continuing to work with participating firms to establish testing parameters and ensure robust consumer protections.

The “Approvals-in-Principle” are a step towards full registration by the SEC and are designed to ensure appropriate protection and transparency for each product or service.

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

“In this context, the ARIP and RI programs remain the only legitimate channels for well-intentioned entities to introduce their digital products and services to the Nigerian capital market,” the statement concluded.