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In summary
- Nigeria’s Securities and Exchange Commission (SEC) has granted its first licenses to local Cryptocurrency exchanges, Busha Digital Limited and Quidax Technologies Limited.
- The licenses were issued under the SEC’s Accelerated Regulatory Incubation Program (ARIP), which seeks to foster innovation and protect investors.
- Nigeria has arrested two Binance executives over the exchange’s operations. The trial is scheduled for next week.
Nigeria’s Securities and Exchange Commission (SEC) has granted its first licenses to local cryptocurrency exchanges to operate within the country, despite contentious relations between the government and the industry at large.
According to a press release from the SEC, both Busha Digital Limited and Quidax Technologies Limited have received “approval in principle” to operate under its Accelerated Regulatory Incubation Program (ARIP). The agency said this development is part of its “commitment to fostering innovation that would deepen the capital market while ensuring investor protection.”
“We commend the SEC under the leadership of Dr. Emomotimi Agama for taking the bold step of establishing order, confidence and investor protection in our industry,” said Buchi Okoro, co-founder and CEO of Quidax, in a statement. “This is a huge win for cryptocurrency adoption in Nigeria, and we are glad to be a part of this historic moment.”
The ARIP, announced in June, is a program to fast-track virtual asset service providers (VASPs) toward compliance with its updated regulatory framework on issuance, exchange, and custody of digital assets. Existing companies were given 30 days to apply for the program or risk facing enforcement action.
Meanwhile, Nigeria has arrested two Binance executives, Tigran Gambaryan and Tigran Gambaryan, over the company’s operations in the country since February. The trial is scheduled to begin next week.
According to a 2023 report by Chainalysis, Nigeria was the second country in the world in terms of cryptocurrency adoption rate per population.
Thursday’s announcement confirms Nigeria’s formal acceptance of cryptocurrencies, which Quidax had prematurely announced earlier in the week. It also follows a tweet from the SEC last Wednesday promising to soon license cryptocurrency exchanges in Nigeria.
As Okoro told Decrypt, the approval was not so much a change of course by the SEC but a “result of years of collaborative effort that takes time to ensure the resources are put in place to ensure compliance.”
In addition to Quidax and Busha, the SEC also announced that five other companies have been admitted to test their new technology under Nigeria’s Regulatory Incubation (RI) program.
The companies are Blockchain platform Trovotech, Nigerian stablecoin provider Wrapped CBDC, real estate token platform HousingExchange.NG, digital real estate investment platform Dream City Capital, and custody platform Blockvault Custodian.
“Other applications received are being evaluated and would be granted approval in principle on a case-by-case basis as they meet all SEC requirements,” the SEC said.
The ARIP and RI programmes are “the only avenues for well-meaning entities” to operate legitimately in the Nigerian capital market, he added.
Edited by Ryan Ozawa.
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