On Wednesday, the Securities and Exchange Commission (SEC) said that it just granted approval-in-principle to two cryptocurrency exchanges in order to provide Nigerian youngsters with capital market participation opportunities.
On Thursday, the SEC awarded Busha Digital Ltd. and Quidax Technologies Ltd. “approval-in-principle” to begin operations under the Accelerated Regulatory Incubation Program (ARIP).
Dr. Emomotimi Agama, Director General of SEC, provided clarification in a statement issued in Lagos. According to Agama, in order to meet President Bola Tinubu’s aim to interact with youngsters, it became necessary to establish a framework that would increase their participation, as well as that of other Nigerians, in the market.
“It is important that we act accordingly. We can not be left out of the global phenomenon that is beginning to take shape. “SEC, as a future-looking institution, is poised to making sure that we are in the league of countries that do what is needed.
“As much as possible, we are building talents to be able to deal with the challenges that these asset classes could bring to our shores. “A lot of young Nigerians are fully involved in cryptocurrencies and we cannot shut the door against them; rather, the intention of the president is to have them included in the capital market.
“That is why SEC is ensuring that there is regulation and no one is hurt at the end of the day, which is part of our responsibility to protect investors and develop the market,”he said.
According to Agama, the commission is doing all of these cautiously to ensure that these institutions do not pose risks to the national economy and to citizens who invested in them.
He disclosed that SEC’s program on the digital asset exchanges emerged from its Virtual Assets Service Providers Regulation in view of the nature of crypto exchanges and the entire industry. The director-general noted that it was important to outline a regulation that allowed the commission to fully understand crypto exchanges and virtual financial asset service providers.
He explained that the notion arose from the SEC’s original Regulatory Incubation Programme, which sought to research emerging fintech platforms and products on the market. Agama stated that this was done to enable the measurement of the risks associated with these institutions and their products. He emphasized that the commission had not yet issued an outright license for any exchange but had given its support in principle.
He stated that the approval was issued as part of a controlled experiment in which companies that have applied and meet the fit and appropriate persons test and other regulatory standards are asked to participate in regulatory incubation.
“It gives us an opportunity to know exactly what they are doing, the risks that they pose to our economy, investors, and to themselves as operators.
“The idea is, you need to do that to be able to study them and provide all the guidance and regulations required by them to operate in the system seamlessly while also not defrauding Nigerians.
“We are making sure that they operate within regulations similar to what is obtainable in other jurisdictions, he said.
