SEC grants approval-in-principle to 2 digital exchanges
The Securities and Exchange Commission (SEC) has granted two digital assets Exchanges “Approval-in-Principle” to commence operation under the Accelerated Regulatory Incubation Program (ARIP).
Ms Efe Ebelo, the spokesperson of the commission announced this in a statement on Thursday in Lagos.
According to Ebelo, the companies that were granted the approval are Busha Digital Ltd., and Quidax Technologies Ltd.
She said that the approval-in-principle was in furtherance of SEC’s commitment to enabling innovation that would deepen the capital market while guaranteeing the protection of investors.
She said that the cohort comprises two digital asset exchanges, four digital asset offering platforms and one digital asset custodian.
“Busha operates a digital exchange that facilitates the buying and selling of crypto assets with fiat currency.
“It enables individuals and businesses in Nigeria and other developing economies to access basic digital asset investment services.
“Busha’s customers use the mobile and web applications to buy, sell, store, send, receive, trade, invest and make payments in cryptocurrencies,” she said.
The spokesperson said that Quidax Technologies operated a cryptocurrency trading platform in Nigeria.
“The platform leverages blockchain technology to list and trade already issued crypto tokens (assets).
“The services are provided via a proprietary blockchain owned and controlled by Quidax,” she said.
According to her, the exchange platform is both web and mobile enabled for ease of access and use.
She said Quidax also utilised digital wallet to enable its users store, receive and transact in a variety of cryptocurrencies.
Similarly, Ebelo confirmed that five firms had been admitted to test their models and technology under the commission’s Regulatory Incubation(RI) Programme.
She listed the companies as Trovotech Ltd., Wrapped CBDC Ltd., HousingExhange.NG Ltd., Dream City Capital and Blockvault Custodian Ltd.
She said that the commission recently introduced ARIP to “strategically on-board firms” which had commenced operations prior to the release of the Rules on Virtual Asset Service Providers in May 2022.
According to her, the current cohort of the ARIP and the RI programmes is characterised by the increased use of distributed ledger technology (“DLT”) in creating and trading crypto assets.
She added that the outcome of the process would inform further policy development in the space.
She said that tests would be conducted on a short-term and small-scale basis, and the commission would continue to work with the participating firms to agree on testing parameters and robust consumer safeguards.
“The referenced approvals-in-principle are a precursor to the granting of full registration by SEC and are meant to ensure that appropriate protection and transparency is in place in respect of each product or service.
“It is noteworthy that the above firms are not the only entities that have applied to ARIP and the RI programmes.
“Other applications received are being assessed and would be granted approval-in-principle on a case-by-case basis as they meet all SEC requirements,” she said.
Ebelo, however, reiterated that only approved digital exchanges and platforms are legally authorised to carry out the business of crypto trading in any form in Nigeria.
She said that in this regard, ARIP and RI remained the only avenues for well-intentioned entities to legitimately introduce their digital products and services to the Nigerian capital market.
She advised the public to refrain from dealing with illegal operators who had not applied to and received SEC’s approval under the ARIP or the RI programme.
“Intending investors are also reminded to always confirm from various SEC information portals whether entities purporting to provide investment services are legally empowered to so do,” she said.
