The Securities and Exchange Commission (SEC) has clarified that the recent approvals of cryptocurrency exchanges in Nigeria are not full licenses but part of a “controlled experiment” designed to safeguard investors and the Nigerian economy.
Emomotimi Agama, the SEC’s Director-General, made this statement on Wednesday during a meeting in Abuja.
On August 29, the SEC awarded Busha Digital Limited and Quidax Technologies Limited “approval-in-principle” to participate in the Accelerated Regulatory Incubation Programme (ARIP). Agama emphasised that no exchange has been fully licensed yet, and the approvals are part of a process in which chosen companies that meet regulatory standards are invited to participate in a regulatory incubation framework.
“This allows us to closely monitor their activities, assess the risks they pose to the economy, investors, and themselves as operators,” Agama told me.
He added that the approach enables the SEC to guide these companies, ensuring they operate within a regulated environment that protects Nigerians from potential fraud and economic disruption. This regulatory oversight is in line with international practices, he noted.
Agama highlighted that this approval aligns with the SEC’s goal of enabling Nigerian youth to engage in the capital market, stressing the importance of creating pathways for their involvement in the industry.
“We cannot afford to ignore the global trends shaping the financial markets,” Agama said. “As a forward-thinking institution, the SEC is committed to ensuring Nigeria remains competitive in this space by developing the necessary talent and infrastructure to address the challenges posed by these emerging asset classes.”
He emphasized that many young Nigerians are already active in the crypto space, and the government’s focus is to include them in the capital market under proper regulation. “Our role is to protect investors and grow the market without stifling innovation,” Agama added.
The SEC’s approach to digital asset exchanges is based on its Virtual Assets Service Providers (VASP) regulation, designed to help the commission understand the operations of crypto exchanges and virtual financial asset service providers.
Agama explained that the initiative stems from the SEC’s earlier regulatory incubation programme, which studied fintech platforms and emerging market products. “To avoid stifling innovation, we created a sandbox to better understand these companies, how they impact customers, the public, and the economy,” he said.
The Accelerated Regulatory Incubation Programme is an extension of this initiative, reflecting the SEC’s commitment to regulating the growing number of firms seeking regulatory oversight.
Agama concluded by noting that the absence of regulation in the crypto space poses risks to the economy, stressing the need to build trust and confidence in the industry.