Nigeria is on the verge of exiting the Financial Action Task Force (FATF) grey list following the integration of cryptocurrency and digital assets regulation into the recently enacted Investments and Securities Act (ISA 2025).
President Bola Tinubu signed the law, which aims to address deficiencies in Nigeria’s anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks, signaling the country’s commitment to financial reform and international compliance.
Placed on the FATF grey list on February 24, 2023, Nigeria faced scrutiny for gaps in its AML and CFT regime.
A strategic path to reform
The Securities and Exchange Commission (SEC) Director-General, Dr. Emomotimi Agama, stated on Wednesday that the inclusion of digital asset regulation in ISA 2025 offers a pathway to exit the grey list.
“The AML CFT issue is what brought about our inclusion in the grey list; the inclusion of this law provides us an avenue to exit that grey list, and that is very critical to the international community,” Agama said.
He further emphasized that the reforms send a clear message to the global community: Nigeria is ready for business and will protect legitimate enterprises.
- The new regulation aims to curb fraudulent activities within the digital finance space while fostering trust and innovation in blockchain technology.
- Agama reassured that trading cryptocurrencies would not weaken the Naira, as the SEC continues to provide guidance to ensure compliance with national interests.
He stated, “SEC now has the power to clamp down on such entities. We encourage everyone in this space to come under regulation to seek clearance.”
Strengthened oversight and investor protection
To manage risks and ensure compliance, the SEC has introduced a moderated regulatory approach through its regulatory incubation and accelerated incubation programmes.
- These initiatives evaluate risks posed by institutions within the digital asset market and guide them toward sustainable operations.
- Dr. Agama disclosed that the next cohort under these programmes will be released in the upcoming quarter after comprehensive evaluations.
- The SEC’s focus on risk management also enhances investor confidence. Agama remarked, “Now, once this happens, the tendency is that investors will be more confident, because they know that we have their back.”
He highlighted the strengthened Know Your Customer (KYC) processes as instrumental in separating genuine investors from malicious actors, further improving market security.
The commission’s collaboration with institutions like the Central Bank of Nigeria, the Economic and Financial Crimes Commission, and the Nigeria Financial Intelligence Unit reinforces Nigeria’s commitment to protecting its economy while embracing innovation.
What you should know
Section C on page 188 of the official clean copy of the ISA bill, seen by Nairametrics, recognizes virtual and digital assets as securities.
- It describes securities exchange or registered exchange as an organised facility that maintains and provides an infrastructure:
(a) for bringing together buyers and sellers of securities, virtual assets, commodities, or financial products or instruments;
(b) for matching bids and offers for securities, virtual assets, commodities, or financial products or instruments of multiple buyers and sellers; and
(c) whereby a matched bid and offer for securities, virtual assets, commodities, or financial products or instruments constitutes a transaction.
This development is expected to strengthen investor protection, enhance accountability, and curb abuse in the rapidly growing crypto sector.
