Nigeria Edges Closer to FATF Grey List Exit After Legal Recognition of Crypto in New Securities Act
Nigeria approaches the list of gray of the financial action group (FATF) after joining the regulation of cryptocurrencies and digital assets in the new law on investments and securities (ISA) 2025.
The historic law, approved by President Bola Tinubu, aims to correct systemic weaknesses in the anti -whiteness frameworks of Nigeria (LMA) and the financing frameworks of terrorism (CFT) – key deficiencies that have earned the country a place on the increased monitoring list of the FATF just over a year ago.
The law signals a turning point for the greatest economy in Africa, which had been under pressure from international partners to connect regulatory gaps operated by money launders and illicit financial networks operating through traditional and digital financing channels.
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Nigeria was officially listed by GADA on February 24, 2023, concerning the concerns that its legal and institutional frameworks did not have the rigor to prevent and adequately respond to financial crimes. Being on the list, often considered a red flag for investors and financial institutions, has noted that the country has been subject to improved surveillance and increased examination of global partners, affecting cross -border financial transactions and foreign investment flows.
But the ISA 2025, which now recognizes virtual and digital assets as titles, has been described by government officials and regulatory initiates as a critical legislative decision towards the reparation of these shortcomings. Dr. Emomomimi Agama, CEO of Securities and Exchange Commission (SEC), said on Wednesday that the updated law offers a path to escape the constraints of the gray list.
“The AML-CFT question is what caused our inclusion in the gray list; the inclusion of this law offers us an avenue to leave this gray list, and this is very essential to the international community,” he said during a press briefing.
The ISA Update is more than simply recognizing digital assets. It seeks to introduce the vast cryptographic space and rapidly evolving into a structured and supervised regulatory environment, according to moving analysts, could strengthen the confidence of investors and market transparency.
Agama said the law strengthens Nigeria’s message to the global financial community. “We are open to business, but we will protect legitimate companies,” he said.
Gramping bad actors in crypto
Beyond attracting it new investors, the SEC decision aims to clean up a sector that has been under the microscope for its use to finance terrorism, money laundering and capital controls.
Dr Agama said the cryptocurrency trade in a regulated environment would not undermine the Naira – a concern raised by central bankers and certain economists. Instead, the dry would apply conformity and are accompanied by rogue actors.
“SEC now has the power to suppress these entities,” he said. “We encourage everyone in this space to be part of the regulations to request authorization.”
To support this, the Commission has introduced two regulatory programs – the regulatory incubation program and the regulatory incubation acceleration program. These initiatives are designed to assess the risks posed by cryptographic and digital financing operators, offer tailor -made regulatory advice and help authentic innovators to operate in a sustainable manner.
Dr Agama revealed that a new cohort of startups and financial technology providers will be admitted in the incubation process during the next quarter after full assessments.
Strengthen investor confidence thanks to surveillance
The updated legal framework also strengthens the protection of investors thanks to the improvement of knowing your customers (KYC), a major point of pain in past regulatory gaps. With Strric Plus KYC, the authorities can separate authentic actors from fraudsters, reducing the risk of scams and financial violence – a critical consideration while more and more Nigerians turn to crypto for savings and cross -border transactions.
“Once this happens, the trend is that investors will be more confident, because they know that we have their backs,” said Agama.
The SEC works in close collaboration with institutions such as the Central Bank of Nigeria (CBN), the Committee on Economic and Financial Division (EFCC) and Nigeria Financial Intelligence Unit (NFIU) to guarantee the coordinated application, in particular in digital transactions without borders.
Digital assets now officially recognized
The new powers of the dry are described in section C, page 188 of the COSE of the ISA. It officially classifies digital assets in securities and lifts them under the measure where the regulations for the exchange of securities.
According to the provision, a recorded exchange now includes any organized platform which:
a) brings together buyers and sellers of securities, virtual assets, products or financial instruments;
(b) corresponds to the offers and offers of several buyers and sellers of these assets;
(c) where paved offers lead to legitimate transactions.
This legislative clarity should help prevent abuses that raged in the cryptographic ecosystem of Nigeria, often operating in a regulatory vacuum. With clear definitions, surveillance responsibilities and application powers now stated, regulators say that it will be more difficult for malicious actors to play the system.
The release of the gray list will open the doors
Although the Nigeria’s release from the Fatf gray list has not yet been confirmed, ISA 2025 could be the strongest case to date for withdrawal. Countries like Morocco and Pakistan have recently left the list after having implemented similar structural reforms in their financial systems, and Nigerian officials are betting on this development to offer the same result.
In the event of success, Nigeria could resume access to smoother cross -border financial operations, restore confidence with international investors and improve its position in global finance.
But the experts warn that the application is the key. While the ISA provides the structure, the challenge lies in the execution. A regulatory framework is only effective as political will and institutional integrity behind it.
