The Securities and Exchange Commission (SEC) has granted ‘Approval-in-Principle’ to two digital asset exchanges, Busha Digital Limited and Quidax Technologies Limited, allowing them to begin operations under the newly introduced Accelerated Regulatory Incubation Program (ARIP).
Watchers say this move marks a significant step in the SEC’s efforts to regulate and oversee digital asset activities in Nigeria.
In a statement released yesterday, the SEC outlined the details of the approved companies.
Busha Digital Limited operates a digital exchange that allows users to buy and sell crypto assets using fiat currency.
The platform offers both mobile and web applications, enabling users to engage in various activities such as buying, selling, storing, and trading cryptocurrencies.
Busha aims to provide digital asset investment services to individuals and businesses in Nigeria and other developing economies.
Quidax Technologies Limited, the second company granted approval, runs a cryptocurrency trading platform that uses blockchain technology to list and trade issued crypto tokens.
The platform supports a range of cryptocurrencies and offers services through both web and mobile applications. Quidax also provides a digital wallet for storing, receiving, and transacting in various cryptocurrencies.
The ARIP is designed to integrate firms that began operations before the SEC’s Virtual Asset Service Providers rules were issued in May 2022. This program aims to streamline the onboarding process for these firms, ensuring they meet regulatory standards while fostering innovation in the digital asset space.
Additionally, the SEC also introduced the Regulatory Incubation (RI) Program. This program focuses on evaluating the business models of digital asset firms and testing new products and technologies in a real-world market environment.
The RI Program is particularly important for assessing how emerging technologies perform under regulatory oversight.
The current cohort under these programs includes:
- Busha Digital Limited
- Quidax Technologies Limited
- Trovotech Limited
- Wrapped CBDC Limited
- HousingExhange.NG Limited
- Dream City Capital
- Blockvault Custodian Limited
The statement says these companies will test their models and technologies under close SEC supervision, with the goal of ensuring that digital asset activities are conducted transparently and securely.
According to the SEC, the ‘Approval-in-Principle’ is an initial step toward full registration. This process ensures that each product or service adheres to appropriate protection and transparency standards before receiving final approval.
“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 is in place in respect of each product or service,” the SEC statement said.
The SEC also cautioned the public against engaging with unauthorized operators. Individuals are advised to verify whether investment service providers have received the necessary approvals from the SEC through official information portals.
The SEC’s regulatory approach is aimed at fostering a safe and transparent environment for digital asset activities in Nigeria. By integrating digital asset exchanges and platforms into the regulatory framework, the SEC hopes to support innovation while safeguarding investor interests.
The increased use of distributed ledger technology (DLT) in creating and trading crypto assets is a key focus of the ARIP and RI Program. The outcomes of these programs will likely inform future policy developments and regulatory measures in the digital asset space.
