The Nigerian Securities and Exchange Commission (SEC) has made a significant move in the regulation of digital assets by issuing provisional licenses to two cryptocurrency exchanges, Quidax and Busha. This development follows the SEC’s recent announcement of its plan to begin issuing its first set of cryptocurrency licenses.
In a statement released recetly, the SEC clarified that these Approvals-in-Principle are initial steps toward full registration. They are designed to ensure that each product or service offered by the exchanges meets the required standards of user protection and transparency.
Quidax and Busha will operate under the SEC’s Accelerated Regulatory Incubation Program (ARIP), launched in July 2024. This program aims to bring existing crypto exchanges, operational before the SEC’s May 2022 regulations for virtual asset service providers, into compliance with regulatory standards.
SEC Director General Emomotimi Agama explained that the provisional licenses allow the exchanges to enter the SEC’s regulatory incubation framework, enabling close monitoring of their operations and the development of appropriate regulatory guidelines.
Busha’s CEO, Michael Adeyeri, welcomed the development, stating on X that Nigerian crypto users deserve secure and regulated local platforms for trading and handling crypto-assets. He views the SEC’s decision as a crucial step in aligning Nigeria’s crypto market with international standards and benefiting the broader economy.
Quidax also confirmed receiving the provisional license, ending uncertainty about the SEC’s stance on crypto licensing. This comes after earlier reports falsely claimed that the SEC had issued a provisional license to a major crypto platform, which the regulator later denied.
In January 2024, there were reports of ongoing discussions between the SEC and at least two crypto exchanges regarding a crypto license, following the Central Bank’s reversal of a two-year ban on crypto-related banking transactions.
The SEC’s recent actions mark a major policy shift for Nigeria’s crypto exchanges, which have faced increased regulatory scrutiny since February 2024. Previously, the SEC had considered banning peer-to-peer (P2P) trading, linking it to foreign exchange market volatility. In May 2024, the SEC Director General met with crypto industry representatives, emphasizing the need for exchanges to remove the Nigerian naira from P2P trading platforms.
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