SEC approves two digital exchanges to protect investors

To protect investors and boost confidence in the capital market, the Securities and Exchange Commission (SEC) yesterday, granted two digital exchanges an ‘Approval-in-Principle’ to commence operation under the Accelerated Regulatory Incubation Program (ARIP).

The two exchanges are Busha Digital Limited and Quidax Technologies Limited. The approval positioned the exchanges as legally recognised crypto platforms in Nigeria.

Besides, the apex capital market regulator also announced the admission of five firms, which are Trovotech Ltd, Wrapped CBDC Ltd, HousingExhange.NG Ltd, Dream City Capital and Blockvault Custodian Ltd to test their models and technology under the SEC’s Regulatory Incubation Program (RI).

The SEC said the cohort comprises two Digital Asset Exchanges, four Digital asset Offering platforms and one Digital Asset Custodian.The commission, in a statement yesterday, reiterated that only approved digital exchanges and platforms are legally authorised to carry out the business of crypto trading in any form in Nigeria.

According to SEC, Busha operates a digital exchange that facilitates the buying and selling of crypto assets with fiat currency, which enables individuals and businesses in Nigeria and other developing economies to access basic digital asset investment services.

It noted that Busha’s customers use mobile and web applications to buy, sell, store, send, receive, trade, invest and make payments in cryptocurrencies.
For Quidax Technologies Limited, the commission said it operates a cryptocurrency trading platform, which leverages blockchain technology to list and trade already issued crypto tokens (assets) in Nigeria.

In addition, the SEC pointed out that 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 are in place with respect to each product or service.

The SEC further stated that the firms are not the only entities that have applied to ARIP and the RI programme, noting that other applications received are being assessed and would be granted Approval-in-Principle on a case-by-case basis as they meet the requirements.

The statement reads: “The SEC uses this medium to reiterate 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.

“The commission therefore strongly advised the public to refrain from dealing with illegal operators who have not applied to and received the SEC’s approval under the ARIP or the RI programme.

“Intending investors are also reminded to always confirm from the various SEC information portals whether entities purporting to provide investment services are legally empowered to so do,” it added.