REGULATION | FATF Crypto Compliance Checklist Raises Red Flags – Which African Countries Are Next?

The watchdog's June 2025 bulletin serves as a fresh reminder that jurisdictions lagging behind could face increased pressure or even sanctions unless they tighten oversight of the virtual asset sector.

CryptoGuru··5 min read

The Financial Action Task Force (FATF) has issued a new call to action, warning that a large number of countries – including several in Africa – are failing to comply with its crypto guidelines, particularly the so-called ‘Travel Rule.’

The watchdog’s June 2025 bulletin serves as a fresh reminder that jurisdictions lagging behind could face increased pressure or even sanctions unless they tighten oversight of the virtual asset sector.

 

The Travel Rule and the Global Shortfall

The Travel Rule requires Virtual Asset Service Providers (VASPs) – such as crypto exchanges and wallet providers – to collect and share information about the sender and receiver in crypto transactions above a certain threshold. It’s a key anti-money laundering (AML) measure that mirrors standards in the traditional banking sector.

According to the FATF, as of June 2024:

  • only 30 out of over 200 jurisdictions had “started enforcement and supervisory measures” for the Travel Rule,
  • nearly three-quarters of jurisdictions are either non-compliant or have taken no action at all.

This raises serious concerns, particularly for regions like Africa, where crypto adoption is high but regulatory frameworks are still evolving.

Where African Countries Stand

The bulletin does not name specific countries, but FATF’s own mutual evaluation database and prior reports shed some light:

  • South Africa: Among the more proactive jurisdictions. It has implemented licensing for VASPs under the Financial Sector Conduct Authority (FSCA) and is reportedly working towards full FATF compliance following its 2023 grey-listing. Its compliance with the Travel Rule is underway but not yet fully enforced.

  • Nigeria: Africa’s largest crypto market has taken a mixed approach. While the Securities and Exchange Commission (SEC Nigeria) has issued guidelines and recently moved to license VASPs, enforcement remains limited. The country has yet to fully implement the Travel Rule, and crypto still operates in a semi-regulated space.

  • Namibia: Recently enacted legislation recognizing crypto service providers and placing them under the purview of the central bank. However, specific Travel Rule provisions have not been reported.

  • Mauritius: A regulatory outlier in Africa, Mauritius has a more advanced digital asset framework and is often cited as a FATF-compliant hub. It has implemented Travel Rule obligations for licensed service providers.


Other African countries like Ghana, Uganda, and Tanzania are still early in their regulatory journeys, with some yet to produce formal VASP regulations, let alone Travel Rule compliance.

 

FATF’s Warning: More Pressure Ahead

The FATF’s bulletin reiterates that countries must “prioritize and accelerate the full and effective implementation of the FATF’s requirements on virtual assets.” It also warned of “jurisdictional arbitrage” – where crypto firms move to less regulated regions – and called on countries to deny licenses to firms operating from non-compliant areas.

This could lead to further crackdowns or restrictions for African crypto startups operating across borders without harmonized rules. Notably, FATF urged that VASPs should not be allowed to operate without proper licensing, echoing concerns raised by regulators in South Africa and Nigeria.

What Comes Next for Africa?

While many African nations are taking steps toward compliance, slow implementation may leave them vulnerable to international scrutiny or even financial de-risking. For example, FATF grey-listing has already affected South Africa and Kenya, complicating their access to global banking and financial services.

 

Prohibition is increasingly being adopted by member countries of the Middle East and North Africa Financial Action Task Force (MENAFATF) and the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG). However, the FATF cautions that such a strategy should be approached with care, as outright bans can be both costly to implement and challenging to enforce.

 

“When jurisdictions opt to prohibit instead of regulate, they don’t eliminate crypto’s presence. Rather, they give up regulatory oversight, enforcement tools, and the ability to monitor illicit financial flows,” said Hedi Navazan, Chief Compliance Officer at 1inch Labs and Vice Chair of the Digital Asset Task Force under the Global Coalition to Fight Financial Crime.

“Let’s be honest – crypto knows no borders,” she added.


As Africa’s crypto economy grows – driven by remittances, inflation hedging, and mobile innovation – ensuring alignment with global AML standards is becoming more urgent. Whether countries will strike the right balance between fostering innovation and enforcing compliance remains to be seen.

 

 

 

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