SiBAN’s seat at the VASP working group: Inside Nigeria’s new risk-assessment moment for blockchain

SiBAN’s appointment to Nigeria’s National Risk Assessment working group on financial crimes is more than a routine industry update. Coordinated by the Nigerian Financial Intelligence Unit (NFIU), this working group includes regulators like the SEC and CBN.

SiBAN’s seat at this table allows it to influence real industry perspective into a national exercise that will shape how virtual assets are understood and supervised for years to come. SiBAN framed the moment as a contribution to “responsible industry development,” helping Nigeria map the actual risks around blockchain with clarity rather than caution.

For SiBAN President Mela-Claude Ake, this is not symbolism; it is a chance to reset the tone of regulation itself. The old compliance model, he argues, was built for a very different world.

“AML/CFT frameworks were largely designed around the drug money flows of the 1980s and 1990s, then expanded reactively after 9/11 for terrorism financing, and have been patched incrementally ever since,” he said.

“The result is a system that is enormously expensive, though largely navigable for sophisticated criminal networks with professional enablers, but actively prohibitive to the marginal populations, immigrants, small businesses and startups.”

That diagnosis sits at the heart of SiBAN’s argument for being in the room. Not to weaken compliance. Not to resist scrutiny. But to insist that the architecture of compliance must finally be modernized for the architecture of blockchain.

Replacing paper trails with programmable compliance

If Ake could redesign one specific requirement to fit the programmable nature of blockchain, he would start with transaction monitoring and suspicious activity reporting (STR). “The current STR framework was designed for a world where a compliance officer manually reviews bank statements and files a paper report,” he explained.

“That logic, observe, suspect, report, wait, is deeply analogue. Blockchain gives us something no traditional financial system has ever had: a public, immutable, real-time ledger. You don’t need to reconstruct a transaction trail after the fact; it’s already there, permanently.”

His proposal is bold yet practical: replace periodic, human-initiated processes with smart contract-based compliance hooks. These programmable rules would flag, hold, or report transactions automatically and transparently at the point of execution.

He believes the NFIU and goAML system should build API interfaces that DeFi protocols and VASPs can integrate directly, turning reporting into a function of the code rather than a burden on overstretched teams. “We’re not asking regulators to abandon AML principles,” Ake stressed.

“We’re asking them to let the technology enforce those principles more efficiently than any human process ever could.”

The greatest danger, Ake warns, is that risk assessment becomes a polite pretext for exclusion. “De-risking is not risk management; it is risk avoidance,” he said. “When a bank shuts down the account of a registered CBN-licensed VASP because the compliance team doesn’t understand the business model, that is not a risk decision; it is an avoidable decision dressed up in compliance language.”

SiBAN will use its presence in the working group to push back concretely:

“First, we will push for clear, tiered risk categorisation that distinguishes between asset classes, transaction types, and business models so that a developer building a local payment dApp is not treated with the same risk profile as an anonymous peer-to-peer exchange operating without KYC. Second, we will advocate for a defined process that any financial institution must follow before withdrawing services from a blockchain business, with documentation requirements and an appeal pathway. And third, we will name the pattern publicly if it persists. The era of quiet de-risking, where startups lose banking access with no explanation, and no recourse, must end,” Ake declared.

For small developer teams, the stakes are immediate. Ake draws a sharp red line when compliance costs exceed the product’s early-stage revenue runway.

“If registering and maintaining regulatory status requires retaining a compliance officer, a legal adviser, filing quarterly reports and paying licensing fees before you have a single paying user, you have not built a safety net. You have built a wall.”

Any framework that imposes full VASP licensing obligations on a team still in testnet, or on a non-custodial protocol that never touches user funds, crosses that line.

SiBAN’s interpretative role

This is precisely why SiBAN sees its interpretive role as its most valuable function. “The gap between how a blockchain engineer describes a protocol and how a regulatory lawyer interprets the same protocol is genuinely enormous,” Ake said.

“That is where SiBAN sits.” To bridge this gap, SiBAN plans to produce plain-language technical briefs for regulators, explaining concepts like non-custodial wallets and DAO governance tokens. They will also bring developers directly into consultation sessions, ensuring regulators hear from the code writers.

If a proposed rule betrays a fundamental misunderstanding of the technology, SiBAN will respectfully but clearly say so.

Underneath the technical arguments lies a larger economic case. Nigeria is already a global leader in crypto adoption, and virtual assets can play a structural role in tackling the country’s stubborn foreign-exchange and cross-border payment bottlenecks. Ake outlines three concrete pathways to achieve this:

1. Regulated stablecoin corridors: Specifically USD and USDC-denominated corridors to slash remittance costs toward near-zero without straining formal banking FX allocations.
2. Tokenized trade finance instruments: Allowing Nigerian exporters to receive payments and settle obligations outside weakened correspondent banking relationships.
3. A clear regulatory framework: To attract institutional crypto liquidity providers who previously avoided the market due to ambiguity.

“Clarity is capital, in this context,” he said. “The NRA can unlock that.”

Twelve months from now, the clearest sign that the NFIU listened to the industry will be a compliant Nigerian blockchain startup successfully opening and maintaining a bank account without needing to explain what blockchain is—or watching that account close without cause.

The working group will have nudged Nigeria toward a regulatory culture that understands technology before trying to control it, proving SiBAN’s seat at the table was not just an honour, but a true turning point.

“That is the ground floor,” Ake noted. “It sounds basic because it is basic. But it is also the most immediate, tangible indicator that policy intent has translated into operational reality.”

Also read: Nigeria’s fintech class of 2015-2016 turns 10 | Here is what a decade built

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