The Securities and Exchange Commission (SEC) of Nigeria has recently granted approval in principle to two digital asset exchanges, including Busha Digital Limited and Quidax Technologies Limited. These firms are now able to begin their operations under the Accelerated Regulatory Incubation Programme (ARIP). The approval comes after an announcement by the SEC of Nigeria, allowing these exchanges to facilitate the buying, selling, storing, sending, receiving, trading, investing, and making payments of cryptocurrencies using fiat currency. Additionally, the ARIP cohort includes two digital asset exchanges, four digital asset offering platforms, and one digital asset custodian.
In addition to Busha and Quidax, five other firms have been admitted to test their business models and technologies under the SEC’s Regulatory Incubation Program (RI). These companies, including Trovotech Ltd, Wrapped CBDC Ltd, HousingExchange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd, will have the opportunity to evaluate their business models and test innovative products, services, and technologies in a controlled market environment under SEC supervision. The issuance of these approvals-in-principle is a preliminary step toward full registration for these firms, as the ARIP and RI programs remain the sole avenues for introducing digital products and services in the Nigerian capital market.
However, the blockchain industry in Nigeria has recently faced challenges, particularly due to the legal disputes between cryptocurrency exchange Binance and the Nigerian government. The Blockchain Industry Coordinating Committee of Nigeria (BICCoN) expressed concerns over these ongoing legal battles, urging a balanced approach to resolve the issues. BICCoN emphasized the potential implications for Nigeria’s blockchain ecosystem and international reputation if the situation is not addressed promptly. The legal battles and detention of Binance executives have created an atmosphere of uncertainty and risk in the Nigerian blockchain industry, potentially deterring investors and partners.
Recent developments in the legal disputes involving Binance and the Nigerian government have drawn international attention to the issue. US lawmakers French Hill and Chrissy Houlahan visited Kuje Prison in Nigeria, where a detained Binance executive is being held, expressing concerns about the conditions of the detention. In a court ruling on June 14, the detained Binance executive was cleared of tax evasion charges, but still faces a separate money laundering case. The CEO of Binance, Richard Teng, has also accused a Nigerian government official of pressuring crypto representatives to accept a secret agreement to settle Nigeria’s claims against the exchange.
Overall, the approval in principle granted by the SEC of Nigeria to digital asset exchanges like Busha Digital Limited and Quidax Technologies Limited marks a significant step in fostering a regulated environment for cryptocurrency operations in the country. While challenges persist, such as the legal disputes involving Binance, the Nigerian blockchain industry continues to grow and innovate. It is crucial for all stakeholders, including regulators, industry players, and investors, to work together to address these challenges and build a sustainable ecosystem for digital assets in Nigeria.
