Nigeria is on the brink of exiting the Financial Action Task Force (FATF) grey list, thanks to the recent incorporation of cryptocurrency and digital asset regulations into the Investments and Securities Act (ISA 2025). This new law, signed by President Bola Tinubu, addresses deficiencies in the country’s anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks, a key reason Nigeria was placed on the FATF grey list in February 2023.
A Path to Reform
The Director-General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, highlighted that the inclusion of digital asset regulation in ISA 2025 is a strategic move to enable Nigeria to exit the grey list. The law sends a clear message that Nigeria is committed to financial reforms and is ready to protect legitimate businesses.
Dr. Agama also reassured that the regulation of digital assets wouldn’t weaken the Naira. The SEC has vowed to enforce compliance to safeguard national interests and encourage regulated entities to operate transparently.
Strengthened Oversight and Protection
The SEC has rolled out several initiatives to manage risks and ensure compliance within the digital finance sector, such as regulatory incubation and accelerated incubation programs. These programs aim to evaluate risks and guide institutions toward sustainable operations, further boosting investor confidence.
Dr. Agama emphasized the strengthened Know Your Customer (KYC) processes, which play a crucial role in distinguishing legitimate investors from fraudulent actors. This will contribute to improving the overall security of the crypto market.
The SEC’s collaboration with key institutions like the Central Bank of Nigeria, the Economic and Financial Crimes Commission, and the Nigeria Financial Intelligence Unit strengthens Nigeria’s commitment to safeguarding its economy while fostering innovation in the digital asset space.
Key Provisions of the New Law
The new law recognizes virtual and digital assets as securities, thus providing a legal framework for the regulation of this growing market. The ISA 2025 defines securities exchanges as organized facilities that bring together buyers and sellers of various securities, including virtual assets, and facilitate transactions by matching bids and offers. This is expected to promote investor protection, enhance market accountability, and curb abuses within the crypto industry.
