Nigerian SEC approves 2 digital asset exchanges

The Nigerian Securities and Exchange Commission (SEC) has granted "approval-in-principle" to two digital asset exchanges, Busha Digital and Quidax Technologies, marking the first authorised platforms of their kind in the country.

This approval is part of the SEC Nigeria’s Accelerated Regulatory Incubation Program (ARIP), which aims to expedite the licensing process for digital asset providers.

Additionally, the SEC has admitted five firms into its Regulatory Incubation (RI) program to test their business models and technology.

Among these five firms, four – Trovotech Ltd, Wrapped CBDC Ltd, Housingexhange.NG Ltd, and Dream City Capital – are digital asset offering platforms.

Blockvault Custodian Ltd has been approved as a digital asset custodian, making it the sole entity in this category under the current RI program.

The ARIP was launched to streamline the onboarding process for entities that submitted license applications, allowing them to begin or continue operations while waiting for comprehensive digital asset regulations to be implemented.

The SEC stated that the current ARIP and RI program participants are characterised by their use of distributed ledger technology (DLT) to create and trade crypto assets.

The SEC plans to conduct short-term, small-scale tests with these entities to refine policies and develop appropriate regulations for the digital asset market.

In its announcement, the SEC emphasised that these tests would include strict consumer safeguards to ensure market integrity and investor protection.

The regulator is also reviewing additional applications from other digital asset exchanges and will grant approvals to those that meet all SEC requirements.

The SEC has warned Nigerian residents to avoid dealing with unauthorised entities that have not applied for or received SEC approval.

Investors are encouraged to verify the legitimacy of any entity offering investment services through the SEC’s official portals to ensure they are engaging with authorised service providers.

The SEC's approach reflects its commitment to fostering a regulated environment for digital assets while protecting consumers from potential fraud and ensuring compliance with financial laws.