Nigeria’s capital market regulator, the Securities and Exchange Commission (SEC) has warned the public against investing in cryptocurrencies including Bitcoin.
Published yesterday, the official public notice is advising investors to be wary of investment schemes and companies soliciting investment via cryptocurrencies. The warning comes after the revelation that MMM Nigeria – a prominent multi-marketing Ponzi scheme – is making a comeback after enabling bitcoin as a form of payment when it reopens its customers’ accounts tomorrow, January 14. The MMM Ponzi scheme’s participants saw their accounts frozen in December.
The warning read:
The attention of the Securities and Exchange Commission has been drawn to radio advertisements and other modes of solicitations of the public to invest in cryptocurrencies such as Swisscoin, OneCoin, Bitcoin and other such virtual or digital currencies. The public is hereby advised to exercise extreme caution with regard to digital (cryptocurrencies) as a vehicle of investments.
The authority also reminded investors that none of companies or individuals publicizing cryptocurrency-related investments were recognized or authorized to receive deposits. Deeming some as “high risk” investment opportunities, the SEC also pointed to “outright fraudulent pyramid schemes” without mentioning MMM Nigeria outright.
With its re-opening tomorrow, MMM Nigeria claims to enable payouts in Bitcoin, in addition to Nigeria’s fiat currency, the naira. The scheme is also luring investors by citing bitcoin’s recent price growth, pointing to further returns in addition to a “30%” monthly growth. Participants have also been informed that they will be able to convert their balances from bitcoin to naira in the event of falling bitcoin prices.
The SEC is also reminding users that there will be no consumer protection available to investors in virtual currencies or schemes using them in the event of them going bust.
It is estimated that three million Nigerians were affected when MMM Nigeria froze subscriber accounts in December.
Image from Shutterstock.