In a major development for Nigeria’s cryptocurrency sector, the Securities and Exchange Commission (SEC) has granted “Approval-in-Principle” to two crypto exchanges, Quidax and Busha.

This development follows months of regulatory crackdown on the crypto market in Nigeria by the SEC.

This approval, under the SEC’s Accelerated Regulatory Incubation Program (ARIP), officially recognizes them as legal entities for crypto trading in the country.

Busha Digital Limited, one of the approved exchanges, operates a digital exchange that facilitates the buying and selling of crypto assets with fiat currency.

On the other hand, Quidax Technologies Limited is a cryptocurrency trading platform in Nigeria that leverages blockchain technology to list and trade already issued crypto tokens (assets).

The SEC noted that these approvals-in-principle are a precursor step toward full registration.

In addition to Quidax and Busha, the SEC has also taken steps to broaden its regulatory oversight by admitting five more companies into its Regulatory Incubation (RI) Program.

These firms—Trovotech Ltd, Wrapped CBDC Ltd, Dream City Capital, HousingExchange.NG Ltd and Blockvault Custodian Ltd—are digital asset platforms that will now test their business models and technologies under the close supervision of the SEC.

The regulatory body stated that the introduction of the ARIP and RI Program was in direct response to the growing need for a regulatory framework that could keep pace with the rapid developments in the crypto space.

The ARIP, according to the SEC targets firms that were operational before the 2022 rules on Virtual Asset Service Providers. Meanwhile, the RI Program is designed to evaluate the business models of digital asset companies and to test innovative products, services, and technologies in a controlled market environment under SEC supervision..

The SEC emphasized that only platforms approved through the ARIP and RI Program are legally authorized to operate in Nigeria’s crypto market.

The Commission also warned the public to avoid unregulated operators, emphasizing that the ARIP and RI Program are the only legitimate avenues for introducing digital products and services to the Nigerian capital market.

For Quidax and Busha, this approval opens the door to a broader market, allowing them to operate with the confidence that comes from being legally recognized.

For the broader market, it sets a precedent that will likely lead to more companies seeking approval, thus bringing some stability and legitimacy to the Nigerian crypto ecosystem.

By integrating these platforms into the regulatory fold, the SEC aims to bring order to what it calls a largely unregulated market, offering users increased confidence and protection.

The SEC also stated that the regulated structure would allow it to better understand the risks and opportunities presented by new technologies, which will, in turn, inform future regulatory policies.