Nigerian Crypto AML/KYC Compliance Guide for Blockchain Companies

Why AML/KYC Compliance Matters for Nigerian Crypto Companies

Nigerian crypto and blockchain businesses are classified as reporting entities under the Money Laundering (Prevention and Prohibition) Act 2022 (MLPA 2022). This means you have mandatory legal obligations to implement AML/CFT controls — regardless of whether you are SEC-registered yet.

Failure to comply can result in:

Criminal prosecution under MLPA 2022

Fines of up to ₦10 million or 3x the value of the transaction

CBN restrictions on banking access

Shutdown of operations by the EFCC or NFIU

KYC Tiers: What You Must Collect

The NFIU requires VASPs to implement tiered KYC based on the risk level and transaction volumes of each customer.

Tier 1 — Basic (No ID)

What you collect: Phone number only

Wallet balance limit: ₦50,000 maximum

Daily transaction limit: ₦10,000 maximum

Who this is for: Very low-risk, low-volume users for micropayments

Tier 2 — Standard (BVN or NIN)

What you collect: Bank Verification Number (BVN) or National Identity Number (NIN), full name, date of birth

Wallet balance limit: ₦500,000 maximum

Daily transaction limit: ₦200,000 maximum

Who this is for: Most retail users

Tier 3 — Enhanced (Full KYC)

What you collect: Government-issued photo ID (passport, national ID card, driver's licence), proof of address, face verification/liveness check

Wallet balance limit: No limit

Daily transaction limit: No limit

Who this is for: High-volume users, business accounts, all users above Tier 2 limits

Enhanced Due Diligence (EDD)

For Politically Exposed Persons (PEPs) and their family members, you must conduct Enhanced Due Diligence before onboarding and on an ongoing basis. This includes:

Understanding the source of funds

Senior management approval for the relationship

Ongoing transaction monitoring

Suspicious Transaction Reporting

Under MLPA 2022, you must report Suspicious Transactions to the Nigeria Financial Intelligence Unit (NFIU) within 24 hours of identifying a suspicious transaction.

What makes a transaction suspicious?

Structuring (breaking large transactions into smaller ones to avoid reporting thresholds)

Transactions inconsistent with a customer's declared business

Rapid movement of funds through wallets with no apparent business purpose

Transactions involving sanctioned countries or individuals

Customers who are reluctant to provide required KYC documents

Unusual transaction patterns that deviate significantly from historical behaviour

Currency Transaction Reports (CTRs): Any single transaction above ₦5 million must be reported to NFIU regardless of whether it is suspicious.

Sanctions Screening

You are legally required to screen all customers and transactions against:

United Nations (UN) sanctions lists

Office of Foreign Assets Control (OFAC) sanctions lists

European Union (EU) sanctions lists

NFIU domestic sanctions lists

CBN watchlists

Screening must occur at onboarding and whenever sanction lists are updated.

The Travel Rule

For crypto transfers above USD 1,000 (or equivalent), you must collect and transmit:

Sender's full name

Sender's crypto wallet address

Sender's account number or national ID

Receiver's full name

Receiver's crypto wallet address

This information must be passed to the receiving institution if they are also a VASP. This is mandatory under both NFIU regulations and FATF Recommendation 16.

Record Keeping Requirements

You must maintain the following records for a minimum of 5 years:

All transaction records (date, amount, parties involved, wallet addresses)

Customer KYC documentation and due diligence records

STR and CTR filings

Staff training records

Internal audit reports

Board and management meeting minutes relating to compliance

Building Your AML/CFT Programme

A compliant AML/CFT programme must include these components:

1.Written AML/CFT Policy — Approved by the board of directors

2.Customer Due Diligence Procedures — Step-by-step onboarding processes for each tier

3.Transaction Monitoring System — Automated alerts for suspicious patterns

4.Sanctions Screening System — Real-time screening of all customers and transactions

5.STR Filing Procedures — Clear process for identifying, documenting, and reporting suspicious transactions

6.Staff Training Programme — Annual AML/CFT training with records

7.Independent Audit — Annual review of the AML programme by internal or external auditors

8.Compliance Officer — A designated officer responsible for oversight of the entire programme

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