The Securities and Exchange Commission (SEC) of Nigeria has provisionally licensed two digital asset exchanges, Quidax and Busha. This comes shortly after the SEC hinted that it would be issuing its first set of crypto licences.
According to a statement by the SEC on Thursday, these Approvals-in-Principle are a step towards full registration by the SEC and aim to ensure appropriate protection and transparency for each product or service.
Both companies will be operating under the Accelerated Regulatory Incubation Program (ARIP) introduced in July 2024. The program was established to onboard crypto exchanges that had already started operations before the SEC released rules on virtual asset service providers in May 2022.
SEC Director General Emomotimi Agama mentioned during a call that the licenses allow the startups to be part of the SEC’s accelerated regulatory incubator, providing an opportunity to study them and establish rules to govern their operations.
Both Quidax and Busha have confirmed receiving the provisional licenses.
This development follows a period of uncertainty regarding the SEC’s position on issuing crypto licenses. Reports had surfaced claiming that the SEC had granted a provisional license to a major crypto platform, which the regulator denied. Earlier in January 2024, it was reported that at least two crypto exchanges were in discussions with the SEC for a crypto license after the Central Bank lifted a two-year ban on crypto-related banking transactions.
This move signifies a significant shift in policy for crypto exchanges, which have been under increased scrutiny from Nigerian regulators since February 2024. The SEC has been vocal about potentially banning P2P trading, which authorities attribute to volatility in the FX market. In a meeting with industry players in May 2024, the SEC DG reiterated the need for crypto exchanges to delist naira from P2P trading.