2 crypto firms gets SEC ‘Approval in Principle’

Two Digital Assets Exchanges have been given “Approval-in-Principle” by the Exchange Commission to begin operating under its Accelerated Regulatory Incubation Program (ARIP).

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

In a statement released yesterday in Abuja, the Commission revealed that five additional companies have been granted permission to test their ideas and technologies through the SEC’s Regulatory Incubation program (RI). They are Blockvault Custodian Ltd., Dream City Capital, HousingExhange.NG Ltd., Wrapped CBDC Ltd., and Trovotech Ltd.

The cohort consists of one (1) Digital Asset Custodian, four (4) Digital Asset Offering Platforms, and two (2) Digital Asset Exchanges, according to the Commission.

According to the statement, “Busha operates a digital exchange that facilitates the buying and selling of crypto assets with fiat currency. Busha’s customers use the mobile and web applications to buy, sell, store, send, receive, trade and invest and make payments in cryptocurrencies.

“Quidax Technologies Limited operates 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. The exchange platform is both web and mobile enabled for ease of access and use. Quidax also utilizes digital wallet to enable its users store, receive and transact in variety of cryptocurrencies.”

SEC recently introduced the 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. Conversely, the RI program was created to assess the business models of Digital Assets firms and test innovative products, services and technology in a real-time market environment under close supervision by the SEC. According to the Commission, “The current cohort of the ARIP and the RI Program is characterized by the increased use of distributed ledger technology (DLT) in creating and trading crypto assets. 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 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”.

SEC reiterated 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,” it stated.