New Digital Asset Regulations Position Nigeria for Removal from FATF Grey List
By Patience Ikpeme
The Securities and Exchange Commission (SEC) has indicated that Nigeria may soon exit the Financial Action Task Force (FATF) “grey list” following the inclusion of digital assets regulation in the recently signed Investments and Securities Act 2025 by President Bola Ahmed Tinubu.
According to a statement released by the SEC on Wednesday, the Director General of the SEC, Dr. Emomotimi Agama, announced in Abuja that the incorporation of digital assets into the ISA 2025 provides the country with a pathway to be removed from the grey list. He explained that the new law is designed to curb fraudulent activities within the digital space, thereby fostering trust and promoting innovation in blockchain technologies.
Nigeria was placed on the FATF “grey list,” signifying increased monitoring, on February 24, 2023, alongside other jurisdictions due to identified deficiencies in its anti-money laundering (AML) and counter-terrorism financing (CFT) regime.
Dr. Agama stated, “It may interest you to know that the AML CFT issue is what brought about our inclusion in the grey List. The inclusion of this law today provides us an avenue to exit that grey list, and that is very critical to the international community. We are telling the international community that we are ready for business, and we are ready to protect every business that operates within Nigeria and all those involved in such activities within Nigeria.”
Dr. Agama clarified that trading in cryptocurrencies does not inherently weaken the Naira. He assured that the Commission will provide guidance for all participants in the digital asset space to ensure their activities align with the national interest.
He said, “This SEC now has the power to clamp down on such entities. So, we encourage everyone who is in this space to come under regulation, to seek clearance, to seek guidance for whatever reason, and we are ready and able to provide solid guidance so that at least the national economic interest is truly protected. So we believe that the regulation, the law itself, will bring succor to them, because once clarity is provided, they are safer in dealing in this kind of businesses.”
Dr. Agama further explained, “The essence of regulating is to provide fences around the institutions, the products, the persons involved in it, and to make sure that they do not involve in things that are illegal. It is important also to note that we are working with the Central Bank of Nigeria, the Economic and Financial Crimes Commission, the Nigeria Financial Intelligence Unit, and the Office of the National Security Adviser on the regulation of this space, in order that it should not be inimical to the existence of Nigeria as a country. What we are doing is to make sure that everyone that is involved in this space is properly guided, because for every investment, even when it is a traditional investment, there’s usually the risk aspect of it. That risk aspect of it is what we are managing.”
Dr. Agama disclosed that the Commission is currently implementing moderated regulation, as it is not feasible to grant licenses to all applicants simultaneously.
He said, “The SEC currently has two programs: the Regulatory Incubation Program and the Accelerated Incubation Program, which are tools that will aid in the evaluation of the risks that the institutions pose to the Nigerian economy and its citizens.”
“It is a process, and in the next quarter, we are going to release the next cohort. After the evaluation of what has happened in the last two quarters, we are going to do that release in this next quarter. We are happy to note that the processes around that are almost concluding, and we will inform the public of the outcome very soon,” he added.
Dr. Agama stated that to address potential challenges arising from the regulation process, the Commission is introducing risk management as a legal instrument to guide the operations of capital market operators and the issuance of securities. This measure aims to mitigate any risks that may emerge in the future.
“Now, once this happens, the tendency is that investors will be more confident, because they know that we have their back. That certainly will improve investor protection. Therefore, KYC is also beefed up through the risk management process today. That also helps us to be able to seek out genuine investors from people who do not mean well for the market, and that also will improve investor’s protection,” he concluded.
