The Securities and Exchange Commission (SEC), has granted "Approval-in-Principle" to two Digital Assets Exchanges for commencement of operations under its Accelerated Regulatory Incubation Programme (ARIP)
The companies granted approvals are Busha Digital Limited, Quidax Technologies Limited.
Disclosing this in a statement in Abuja on Thursday, the Commission added that five other firms have been admitted testing their models and technology under the SEC's Regulatory Incubation program, RI.
They are Trovotech Ltd, Wrapped CBDC Ltd, HousingExhange.NG Ltd, Dream City Capital and Blockvault Custodian Ltd.
The Commission noted that the cohort comprises of 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. Busha's customers use the mobile and web applications to buy, sell, store, send, receive, trade and invest and make payments in cryptocurrencies," the statement said.
"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.
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