NFIU warns on terrorist financing identity laundering

The India — Financial Intelligence Unit – India (NFIU) released its 2025 Annual Report, warning that terrorist financiers are exploiting gaps in Nigeria's digital identity and financial systems. The report identifies emerging methods such as pre-registered SIM cards, SIMs registered to deceased persons, and proxy bank accounts opened in women's names to conceal the identities of those controlling illicit funds. The NFIU describes this as 'identity laundering,' where male commanders and logistics managers secretly control accounts held in women's names, often without the women's knowledge. The report also flags weak customer identification controls and limited oversight of certain digital financial services as enablers of financial crime. In response, Nigerian regulators have taken steps to strengthen controls: the Nigeria — National Identity Management Commission migrated telecom operators to its NINAuth platform in July 2025; the Nigeria — Central Bank of Nigeria directed banks to improve fraud responses in January 2026 and introduced new security requirements for mobile banking in March 2026; and the United States — United States Securities and Exchange Commission ordered capital market operators to subscribe to the Nigeria Sanctions (NigSac) Alerts system on August 12, 2026. These measures aim to close gaps between SIM registrations, BVNs, NINs, and account ownership to better trace and disrupt illicit financial flows.