CBN begins virtual asset anti-money laundering supervision, names Paystack, Flutterwave for pilot

The Central Bank of Nigeria (CBN) is tightening its grip on virtual asset activity by commencing an Anti-Money Laundering, Counter-Financing of Terrorism, and Counter-Proliferation Financing (AML/CFT/CPF) supervision pilot, involving a select group of Virtual Asset Service Providers (VASPs).

In a directive dated March 31, the apex bank stated that the pilot forms part of its risk-based supervisory programme. It added that it supports ongoing efforts to strengthen financial system stability and market integrity oversight of virtual asset-related activities within its mandate.

The pilot, according to the CBN, does not alter, replace or supersede the existing regulatory framework governing virtual assets in the country or the mandates of other competent authorities.

The CBN listed some of Nigeria’s most visible fintech and crypto-adjacent players, including cNGN, Flutterwave, Juicyway, KoinKoin, KuCoin, and Paystack, as the first set of VASPs to be engaged under the pilot.

Nigeria is one of the world’s most active virtual assets markets. According to Chainalysis, a cryptocurrency analysis firm, Nigerians transacted $92.1 billion in cryptocurrencies between July 2024 and June 2025, nearly triple that of the next African country, South Africa. 

In 2025, the Investment and Securities Act (ISA) recognised the country’s Securities and Exchange Commission (SEC), its capital markets authority, as the digital assets regulator.

In a White Paper released by the Virtual Asset Regulatory Authority (VARA), the country’s cryptocurrency regulatory council formed in August 2025, the government disclosed that it was building a coordinated supervisory model anchored by the newly established Virtual Asset Regulatory Council (VARC) and the Virtual Asset Regulatory Office (VARO).

The approach distributes oversight across regulatory agencies, including the CBN and the Nigeria Revenue Service (NRS), the country’s tax collection body, according to the White Paper. 

In its new directive, the apex bank noted that the pilot is meant to help it understand AML/CFT/CPF risks, business models, and operational practices across the participating companies.

The pilot will push these firms to align with global standards, particularly the Financial Action Task Force (FATF) recommendations around the Travel Rule, which requires firms to share transaction data across platforms, and other requirements under FATF Recommendations 15 and 16.

In October 2025, Nigeria was removed from the FATF grey list; it had been on that list since February 2023. Part of the requirement for leaving the FATF list included stronger anti-money-laundering regimes and improved transparency in their financial systems.

During the pilot, participating firms will submit monthly AML/CFT/CPF performance metrics, engage directly with supervisors, and undergo reviews across governance, customer onboarding, sanctions, transaction monitoring, and cross-border activity, while demonstrating credible implementation plans for the FATF Travel Rule

The inclusion of the Nigeria Financial Intelligence Unit (NFIU) in parts of the process signals how seriously authorities are taking enforcement.

The CBN noted that participation in the pilot is strictly supervisory and does not confer any regulatory status, approval, licensing right, or authorisation on participants.