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Investors Urged to Patronise only Registered Investment Schemes
Investors staking their funds in investment schemes not registered with the Securities and Exchange Commission (SEC) and any other regulators in Nigeria stand chances of not being protected against any loss that may arise from risks associated with such investments.
As a result, SEC has advised investors to patronise registered funds. According to SEC, it has been drawn to radio advertisements and other modes of solicitations of the public to invest in cryptocurrencies such as Swisscoin, OneCoin, Bitcoin and such other virtual or digital currencies.
The regulator advised the exercise extreme caution regarding this form of investment.
“The public is hereby advised to exercise extreme caution with regard to digital (crypto currencies) as a vehicle of investments. This warning is in consonance with similar warnings issued by capital market regulators and central banks across the world over the past few years,” the commission said.
It noted that none of the persons, companies or entities promoting these vehicle of investments.
“The commission, wishes to alert the public that none of the persons, companies or entities promoting cryptocurrencies has been recognized or authorized by it or by other regulatory agencies in Nigeria to receive deposits from the public or to provide any investment or other financial services in or from Nigeria. The public should also be aware that any investment opportunities promoted by these persons, companies or entities are likely to be of a risky nature with a high risk of loss of money, whilst others may be outright fraudulent pyramid schemes,” SEC said.
It explained that given that these instruments and the persons, companies or entities that promote them have neither been authorized, nor any guidelines/regulations developed for them by any of the regulatory authorities in Nigeria, there is no protection available to users or investors in these virtual currencies from financial losses if the virtual currencies fail or the companies promoting them go out of business.
“The public and consumers of financial services are further advised that before making any investment or entering into any financial services transaction they should ascertain that the entity with whom the investment or transaction is being made is authorised by the commission or other financial services regulatory authority as applicable to provide such services,” the regulator said.
It is believed that the operators of the a ponzi scheme MMM Federal Republic of Nigeria, are behind the virtual currencies funds.
SEC had last year warned investors against MMM that was asking investors to invest, promising them a monthly return of 30 per cent.
