The Securities and Exchange Commission (SEC) says Nigeria will soon exit the Financial Action Task Force (FATF) grey list with the inclusion of digital assets regulation in the recently signed Investments and Securities Act (ISA 2025) by President Bola Tinubu.

Nigeria was placed on the FATF “grey list” on Feb. 24, 2023, alongside other jurisdictions.

This was due to deficiencies in its anti-money laundering (AML) and counter-terrorism financing (CFT) regime.

Emomotimi Agama, director-general, SEC, confirmed this in a statement on Wednesday.

Mr Agama said the inclusion of digital assets in the ISA 2025 provided the country with an avenue to exit the grey list.

He noted that the new law aimed to curb fraudulent activities in the digital space, fostering trust and innovation in blockchain technologies.

He said, “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.”

Mr Agama emphasised that trading in cryptocurrencies does not translate into a weaker naira.

He explained that the commission was going to provide guidance for all the actors to ensure that their acts do not go against the national interest.

He said, “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 business.

“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.

“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.

“We want 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.”

Agama disclosed that the commission is currently carrying out moderated regulation as it is not possible to grant licenses to all those that have applied to operate in the space at the same time.

“SEC currently has two programmes: the regulatory incubation programme and the accelerated incubation programme, 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, and 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 said.

He noted that in a bid to deal with challenges that may arise in the process of regulation, the Commission was introducing risk management as a legal instrument to guide the operations of capital market operators and the issuances of securities.

He said this was also to be able to mitigate any risk that will arise in the nearest 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 investors’ protection,” he said.

(NAN)