SEC NIGERIA CAUTIONS PUBLIC ON VIRTUAL CURRENCIES

The Securities and Exchange Commission of Nigeria (SEC Nigeria) has issued a formal warning to the investing public to be cautious over cryptocurrencies now being advertised in Nigeria.

According to SEC Nigeria, the warning was in line with similar warnings issued by different capital market regulators and central banks across the world in the past few years.

In the notice dated January 12, SEC Nigeria drew attention to various radio and other advertisement asking people to invest in different cryptocurrencies like Swisscoin, One coin, Bitcoin, and others and said:

"The public is hereby advised to exercise extreme caution with regard to digital (cryptocurrencies) as vehicle of investments".

It added that " The commission wishes to alert the public that none of the persons, companies or entitites promoting cryptocurrencies
has been recognised or authorised by it or other regulatory agencies in Nigeria to receive deposits from the public or to provide any investment or other financial services in or from Nigeria".

Hence business opportunities promised by them are "likely to be ....with a high risk of loss of money while others may be outright fraudulent pyramid schemes".

Potential investors, says SEC Nigeria are to note that because they are not registered or licensed, there is no protection for any investor like that offered by the National deposit insurance scheme; the Nigerian investor protection fund and indeed, there may be little or no redress opportunities in Nigerian laws.

In other words, says SEC Nigeria, it is in the interest of each investor to ascertain if any investment outlet is duly registered or authorised in Nigeria by relevant regulatory agencies before investing hard earned money.

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