FATF Greylist Countries: Crypto Implications and Restrictions

When you send crypto from New Zealand to Nigeria or Vietnam, you might not think about government lists. But behind the scenes, those transactions are being checked against a global watchlist that can freeze accounts, block transfers, or trigger legal reports. This isn’t science fiction - it’s the real-world impact of the FATF greylist.

What Is the FATF Greylist?

The Financial Action Task Force (FATF) is an intergovernmental body that sets global standards to fight money laundering and terrorist financing. It doesn’t have police power, but its recommendations carry weight. Banks, exchanges, and payment processors around the world follow FATF rules because failing to do so risks losing access to the global financial system.

The FATF greylist - officially called "Jurisdictions Under Increased Monitoring" - includes countries that have agreed to fix serious gaps in their anti-money laundering and counter-terrorism financing systems. These aren’t rogue states like North Korea or Iran (those are on the blacklist). Instead, these are countries that know they have problems and are trying to fix them - but haven’t finished yet.

As of June 2025, the greylist has 24 countries: Algeria, Angola, Bolivia, Bulgaria, Burkina Faso, Cameroon, Côte d'Ivoire, Democratic Republic of the Congo, Haiti, Kenya, Laos, Lebanon, Monaco, Mozambique, Namibia, Nepal, Nigeria, South Africa, South Sudan, Syria, Venezuela, Vietnam, Virgin Islands (UK), and Yemen.

Bolivia and the Virgin Islands (UK) were added in June 2025. Croatia, Mali, and Tanzania were removed after completing their reform plans. That’s how this system works: it’s not permanent punishment. It’s a deadline-driven fix.

Why Does It Matter for Crypto?

Crypto isn’t outside the system - it’s part of it. Every major exchange, wallet provider, and crypto platform must follow FATF rules. That means they’re required to know who their customers are, where their money comes from, and where it’s going.

If you’re sending crypto to someone in Nigeria (on the greylist), your exchange might:

• Ask for extra ID or proof of income
• Delay the transaction for manual review
• Block it entirely if the risk is too high
• Report the transaction to local financial authorities

This isn’t just about "bad actors." Even ordinary users in greylist countries face delays because exchanges can’t risk being fined or shut down. One crypto exchange in Singapore told me they turned away 12,000 Nigerian users in 2024 after FATF updated its guidance. Not because those users were suspicious - but because the country’s risk rating went up.

The same applies to businesses. If you run a crypto startup and your customers are mostly from Venezuela or South Africa, your bank might cut your account. Your payment processor might refuse to work with you. Your insurance provider might drop you. It’s not personal - it’s compliance.

Blacklist vs. Greylist: The Difference That Matters

There’s a big gap between the blacklist and the greylist. The blacklist - North Korea, Iran, and Myanmar - means full isolation. No bank will touch transactions from these places. Crypto exchanges are required to block them entirely.

Greylist countries? They’re not blocked. But they’re flagged. Every transaction gets a red light. It’s like being pulled over for a routine check - you’re not guilty, but you’re being watched closely.

Here’s what that looks like in practice:

Comparison of FATF List Impacts on Crypto Transactions

Aspect	Blacklist Countries	Greylist Countries
Transaction Blocking	Yes - fully prohibited	No - but subject to enhanced review
Customer Verification	Maximum level - source of funds, identity, purpose	Enhanced - additional documentation required
Reporting Requirements	Immediate reporting to regulators	Regular reporting if flagged
Banking Access	Effectively cut off	Restricted - higher fees, longer processing
Exchange Compliance Cost	Very high - may exit market	High - but often managed with monitoring tools

How Crypto Platforms Handle Greylist Countries

Most serious crypto platforms use automated systems that check every transaction against FATF lists in real time. If a wallet address is linked to a greylist country, the system triggers a review. Sometimes, it’s just a form. Other times, it’s a full investigation.

The challenge? Blockchain is anonymous. A crypto address doesn’t say "Nigeria" or "Venezuela." So platforms use IP geolocation, KYC data, wallet history, and third-party analytics tools to estimate jurisdiction. It’s not perfect. False positives happen. A user in Kenya using a VPN might get flagged. A Nigerian living in Germany might still get blocked because their wallet history shows past activity in Lagos.

Some platforms respond by simply refusing service to entire countries. Others build layered compliance systems: basic verification for low-risk users, deep checks for greylist-linked activity. The cost? A single exchange told me they spent $2.3 million last year on compliance software and staff just to handle FATF-related checks.

Why Some Countries Stay on the List

You’d think if a country fixes its laws, it gets off the list. But that’s not always true.

Syria and Yemen have technically met FATF’s technical requirements. But FATF can’t send inspectors in because of war. So they stay on the list. It’s not about policy - it’s about access.

South Africa was added in 2024 because of corruption. Over 80% of citizens believe corruption got worse. Government officials ignored financial crimes. Banks didn’t report suspicious activity. FATF said: "You have the rules, but you don’t enforce them." That’s the real issue. It’s not that these countries don’t have laws. It’s that they don’t have accountability. And crypto platforms can’t risk working with systems where bribes override compliance.

What Happens When a Country Gets Removed?

When Croatia, Mali, and Tanzania were removed from the greylist in June 2025, it wasn’t just a PR win. It was a financial lifeline.

Crypto exchanges reopened services. Payment processors lowered fees. Local startups could finally get bank accounts. One Nigerian crypto founder told me his team had been waiting two years to launch a remittance app to Tanzania. As soon as the delisting was announced, they signed their first bank partnership.

Delisting doesn’t mean perfection. It means the country has shown it’s serious. And for crypto businesses, that’s enough to start investing again.

Greylist Countries Are Still Using Crypto

Don’t assume FATF restrictions stop crypto use. They just change how it’s used.

In Nigeria, people use crypto to send money home because the local banking system is slow and expensive. In Venezuela, crypto is a lifeline for buying food and medicine. In Iran, the government is building its own digital currency to bypass sanctions.

Crypto isn’t disappearing from greylist countries - it’s thriving in the shadows. Peer-to-peer trading, decentralized exchanges, and privacy coins are growing fast. But that’s not a win for freedom. It’s a sign that the system is broken.

When legitimate channels are blocked, people turn to riskier ones. And that’s exactly what FATF wants to avoid.

What You Need to Do

If you’re a crypto user in a greylist country:

• Keep your KYC documents updated - ID, proof of address, tax number
• Be ready to explain where your crypto came from - mining, salary, sale of assets
• Avoid mixing funds from multiple sources - it raises red flags
• Use reputable exchanges - they’re more likely to handle greylist compliance properly

If you’re a business or developer:

• Automate FATF list updates in your compliance system
• Train your team on jurisdictional risk tiers
• Don’t assume "no block = no risk" - greylist still means high scrutiny
• Monitor changes monthly - the list updates every February and June

What’s Next?

FATF is working on new rules for DeFi and decentralized exchanges. Right now, most crypto compliance focuses on centralized platforms. But as DeFi grows, regulators will demand the same level of traceability.

The "Travel Rule" - which requires exchanges to share sender and receiver info for transactions over $1,000 - is being expanded. Soon, even peer-to-peer platforms might need to collect and transmit that data.

Central bank digital currencies (CBDCs) could also change the game. If governments issue their own digital money with built-in tracking, it might make crypto’s anonymity less useful - and less risky for regulators.

The bottom line? FATF isn’t going away. Its greylist is a living, breathing tool that shapes how crypto moves around the world. Ignoring it doesn’t make it disappear. Understanding it is the only way to operate without getting caught in the crosshairs.