Nigerian SEC issues fraud alert on Bitcoin, Onecoin investments


The Nigerian Securities and Exchange Commission, SEC has issued a public fraud alert on the activities of schemes peddling Bitcoin, Swisscoin, OneCoin and other cryptocurrencies as investment product.

Apparently some fraudsters have started using radio advertisements to promote Bitcoin and other digital currencies. The SEC said its attention was drawn to such messages which solicit the public to invest in them.

Just as has warned overtime that genuine cryptocurrencies such as Bitcoin and few others are majorly good for payments because their is low transanction costs ex[ecially for small business owners, it is not in anyway recommended as a currency for savings and investment and even curreny trading because of their volatile value.

Also, the SEC fraud alert should be put into perspectives. Bitcoin is a  legitimate cryptocurrency that is okay for payments. While OneCoin is Ponzi cryptocurrency that has no value and or acceptance apart from the round tripping in the OneLife Network Services were people pay huge amounts of Euros (EUR) to buy packages in order to invest in OneCoin. PageOne has reported various fraud alerts and banning of OneCoin promotion across Italy and other countries.

Therefore, it will also be good to see the SEC call out each cryptocurrency one after the other by issuing fraud alerts, analysing their veracity. Fake cryptocurrency such has OneCoin has no value whether as a means of payment and or investments.

Other securities and financial regulatory boards have issued fraud alerts on major fake cryptocurrencies. The SEC should go beyond a blanket statement that might imply that digital currencies are not in anyway good.

It will also be good to go beyond fraud alerts by seeing a possibility of licensing Bitcoin and proper cryptocurrency exchange for Nigerians to be able to take advantage of digital currencies.

See the Nigerian SEC statement below:

The attention of the Securities and Exchange Commission, (the 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 such other virtual or digital currencies.

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, 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.

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 authorized by the Commission or other financial services regulatory authority as applicable to provide such services.