Nigeria may soon exit the Financial Action Task Force (FATF) grey list, following the signing of the Investment and Securities Act 2025 by President Bola Tinubu.
According to the Director-General of the Securities and Exchange Commission (SEC), Emomotimi Agama, the inclusion of digital asset regulation in the new law provides an opportunity for Nigeria to address key gaps in its anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks.
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Why Nigeria Was Added to the FATF Grey List
The Financial Action Task Force (FATF) is an international body that sets standards for combating money laundering, terrorist financing, and other threats to the global financial system.
Countries placed on the FATF grey list are considered to have strategic weaknesses in their AML/CFT systems. While they are not subject to sanctions, they are placed under increased monitoring and expected to implement corrective measures within a defined timeframe.
Nigeria was added to the FATF grey list in February 2023 due to identified deficiencies in its efforts to prevent financial crimes.
How the New Law Fits In
The recently signed Investment and Securities Act 2025 introduces a legal framework for regulating digital assets and the entities that offer them. This includes cryptocurrency exchanges, digital token issuers, and other virtual asset service providers.
For the first time, Nigeria’s capital market regulator now has clear authority to supervise and guide operators in the digital asset space. According to the SEC, this is a significant step toward improving transparency, reducing illicit activity, and aligning with global regulatory expectations.
A Coordinated Regulatory Approach
The SEC has also emphasised the importance of collaboration with other key agencies such as the Central Bank of Nigeria (CBN), the Economic and Financial Crimes Commission (EFCC), the Nigeria Financial Intelligence Unit (NFIU), and the Office of the National Security Adviser (ONSA).
Together, these agencies aim to create a safer digital asset environment that protects investors and discourages misuse of financial technologies.
To support this effort, the SEC is implementing a phased licensing process through two initiatives: the Regulatory Incubation Programme and the Accelerated Incubation Programme. These programmes are designed to assess the risks posed by digital asset businesses and ensure they meet regulatory standards before being fully licensed.
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Looking Ahead
Being on the FATF grey list can affect a country’s ability to attract foreign investment and engage confidently in international finance. While Nigeria remains on the list for now, the SEC believes that the new law, combined with inter-agency collaboration, strengthens the country’s case for removal.
Nigeria has already complied with 37 out of FATF’s 40 recommendations, and the new digital asset regulatory framework may help close the remaining gaps.
Conclusion
With the passage of the Investment and Securities Act 2025, Nigeria is taking measurable steps to modernize its financial regulation and improve investor confidence. If fully implemented, these reforms may not only support Nigeria’s exit from the FATF grey list but also lay the groundwork for a more secure and innovative digital asset ecosystem.
