Tekedia Capital portfolio company, HXAfrica, Makes Progress on SEC Nigeria Licensing

Tekedia Capital portfolio company, HXAfrica, makes progress on its licensing with Nigeria’s Securities and Exchange Commission. Read the SEC press release.

SEC Press release below…

In furtherance of its commitment to enabling innovation that would deepen the capital market while guaranteeing the protection of investors, the Securities and Exchange Commission (“the SEC”) hereby announces that two (2) Digital Assets Exchanges have been granted “Approval-in-Principle” to commence operation under the Accelerated Regulatory Incubation Program [“ARIP”].  Similarly, 4 firms have been admitted to test their models and technology under the SEC’s Regulatory Incubation [“RI”] Program.

It would be recalled that the SEC introduced the ARIP to strategically on-board firms which had commenced operations prior to the release of the Rules on Virtual Asset Service Providers in May 2022. Conversely, the RI Program was created to assess the business models of Digital Assets firms and test innovative products, services and technology in a real-time market environment under close supervision by the SEC.

Specifically, the current cohort of the ARIP and the RI Program is characterized by the increased use of distributed ledger technology [“DLT”] in creating and trading crypto assets The outcome of the process would inform further policy development in this space.  Tests would be conducted on a short-term and small-scale basis and the SEC would continue to work with the participating firms to agree on testing parameters as well as robust consumer safeguards.

The referenced Approvals-in-Principle are a precursor to the grant of full registration by the SEC and are meant to ensure that appropriate protection and transparency is in place in respect of each product or service.

HXAfrica solution is designed to enable developers raise capital via tokenization of properties and also provide an avenue to liquidate investments via the integrated Exchange feature.  Intended lot sizes for real estate tokens are planned to be ?50,000.  Token owners would also earn rent and capital gains.

It is noteworthy that the above firms are not the only entities that have applied to ARIP and the RI Program.  Other applications received are being assessed would be granted Approval-in-Principle on a case-by-case basis as they meet all SEC requirements.

The SEC uses this medium to reiterate that only approved digital exchanges and platforms are legally authorized to carry out the business of crypto trading in any form in Nigeria. In this regard, the ARIP and RI remain the only avenues for well-intentioned entities to legitimately introduce their digital products and services to the Nigerian Capital market.

The public is strongly advised to refrain from dealing with illegal operators who have not applied to and received the SEC’s approval under the ARIP or the RI Program. Intending investors are also reminded to always confirm from the various SEC information portals whether entities purporting to provide investment services are legally empowered to so do.

Register for Tekedia Mini-MBA (Sept 9 – Dec 7, 2024), and join Prof Ndubuisi Ekekwe and our global faculty; click here.