SEC Grants Approval to Two Crypto Firms as Regulatory Landscape Shifts

Samuel Mobolaji

Busha Digital Limited and Quidax Technologies Limited, both digital asset exchanges that facilitate cryptocurrency trading, have received Approval-in-Principle from the Securities and Exchange Commission (SEC). This marks their formal entry into the Accelerated Regulatory Incubation Program (ARIP).

The SEC’s move also includes the induction of five additional firms into its Regulatory Incubation (RI) Program. This initiative allows companies to test their business models and technological innovations under the supervision of the SEC.

The ARIP was introduced to onboard firms that were already operational before the release of the SEC’s Rules on Virtual Asset Service Providers in May 2022. The RI Program, meanwhile, evaluates digital asset firms’ business models, enabling them to test innovative products, services, and technologies in a controlled, real-time market environment.

The current cohort for both the ARIP and RI Programs is characterized by the increased use of distributed ledger technology (DLT) in creating and trading crypto assets.

Michael Adeyeri, CEO of Busha, expressed his views on the development, emphasizing the need for safe and regulated platforms for Nigerian crypto enthusiasts. Buchi Okoro, CEO of Quidax, also confirmed the news.

Busha provides digital asset investment services to users in Nigeria and other developing economies, while Quidax operates a cryptocurrency trading platform leveraging proprietary blockchain technology.

The five firms admitted to the RI Program cover various segments of the digital asset ecosystem, ranging from Trovotech Ltd’s blockchain platform for tokenized real-world assets to Wrapped CBDC Ltd’s plans for a Nigerian stablecoin. Other companies focus on property tokenization, digital real estate investments, and digital asset custodial services.

The SEC highlighted that these approvals are preliminary and aim to ensure consumer safeguards and transparency. It also stressed that only approved digital exchanges and platforms are legally authorized to operate in Nigeria.

This development signifies a shift in the regulatory approach toward cryptocurrency platforms in Nigeria. Despite previous resistance, Nigerians have remained active in cryptocurrency trading, placing the country among the top global players.

The Central Bank of Nigeria recently lifted a two-year ban on banking transactions involving cryptocurrencies, suggesting a changing regulatory landscape. However, concerns remain about the impact of peer-to-peer trading on the volatility of the foreign exchange market.

In May 2024, SEC’s Director General, Emomotimi Agama, reiterated the need for tighter oversight on crypto transactions to stabilize the local currency and urged exchanges to delist the naira from P2P trading.