MMM: SEC warns Nigerians against investing in Bitcoins, other digital currencies

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Nigerians have been warned against investing in digital currencies such as Bitcoin, Swisscoin and OneCoin.

The Securities and Exchange Commission, SEC, disclosed this in a public notice on its website on Thursday, stating that none of the individuals or companies promoting the use of the currencies is recognised by it or any other regulatory agency in Nigeria.

The commission stressed the risks and possibilities of investors losing their money to such investments being promoted by these companies, including fraudulent pyramid schemes.

This comes in the wake of the return of Nigeria’s leading Ponzi scheme, MMM Nigeria, which had earlier placed a one-month ban on all withdrawals from December 13, 2016.

Upon resumption, the scheme introduced the use of bitcoins as part of its payment options, citing bitcoin’s steady growth in value as a reason for participants to adopt the currency.

However, SEC advised the public to exercise extreme caution with regard to digital currencies as a vehicle of investments.

“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, while others may be outright fraudulent pyramid schemes,” the regulatory body noted.

SEC added 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 authorized by the commission or other financial services regulatory authority as applicable to provide such services.”

The Nigerian Insurance Commission, NDIC, in conjunction with Central Bank of Nigeria, CBN, had earlier set up a committee to study the trending digital currency, ‘Bitcoin’.

According to the NDIC managing director, Umaru Ibrahim, the commission would look at the advantages and disadvantages of the currency and what it means for the payment systems in Nigeria as well as safety and security of customers.

Mr. Ibrahim said this at the 2016 Workshop for Financial Correspondents in Kaduna.

Such digital currencies, otherwise known as Cryptocurrency, is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency.

Bitcoin became the first decentralized cryptocurrency in 2009.

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  • Kevin Peter

    How ignorant! The world of digital currency unlike fiat money has come to stay. What SEC has forgotten to note is that digital currencies like bitcoin are decentralized with no central government control all over the world. Just like the internet being embraced on a daily basis, digital currencies depend on the forces of demand and supply, far different from the so called Ponzy schemes where they rob Peter to pay Paul. If America had its way, there’s no how they could have allowed bitcoin to overtake dollar in value currently hovering over $800 to just one bitcoin! The truth is that digital currency is a game changer giving signals that fiat currencies – dollars, pounds euros and nairas will give way to a more acceptable medium of exchange where government control and high charges would no longer be in vogue. Today, we have people doing their shopping’s from the comfort of their rooms with ease due to technology. To understand digital currency better, a phone recharge pin sent by text from Kaduna to someone in Lagos is a classical example of digital currency. It lives among us but unfortunately, our ignorant colleagues in such vital organs of government are living in the dark!

    • Fred Duke

      Well said. But seriously if MMM comes back, we all know that it is simply postponing the evil day which is inevitable.

      • factfinder

        For your mind and especially now that bitcoin is introduced in the system? Forget!

        • Fred Duke

          Hahahahahaha… The whole thing was a scam. And they’ve successfully duped millions of Nigerians. With bitcoin, the opportunity to swindle you yet again is enormous. And your bitcoin can now be transferred to (u can easily be paired with ) someone who resides in Dominican Republic or in Iraq. Once they monitor the trend and find out that reasonable amount has been pledged, you would be asked to pay in bitcoin to Mr X or Y who lives in Egypt and sooner or later, the system will crash. You shd be interested in how MMM folded up in each of the countries they operated in. It is a “rob Peter to pay Paul” scheme until there are no new Peters anymore, or until the old Pauls are more than the new Peter. Find out how MMM Zimbabwe folded up.

          • Olivia17

            Well said… Just few questions pls. Let’s assume this your long essay is true, What’s your business if i decide to use MY money? How does it concern you? Is it your money?

          • Ilesanmi Dunjoye

            Fred Duke has no right on how you make use of you money. He has just offered an advice as a concerned person.
            I wish you good luck.

          • Fred Duke

            I have no business. But its funny how gullible people can be. I’ve just read this and I’m glad you’ve moved on as I predicted you would. Just a fact check… My long essay didn’t come true. It was true right from when I told you, but your brain processes facts a little too slow. Happy Valentine’s day. Just keep checking, you might find another ponzi scheme you can invest in, as long as u can move on when it crashes. There are quite many now, unlike mmm that looked so magical to you.

          • Ilesanmi Dunjoye

            Thank you Bro. FRED DUKE for making well informed and intelligent addition to the gospel desuading the gullible from the MMM noose. I have been severally insulted and castigated in my efforts to explain the danger of such an investment. Every wise adult should be able to the MMM as frausters even by the introduction of bitcoin payment sytem, because the trick to makes the sheme look upgraded but an easier way of beating regulatory authorities in scooping more money from the gullible.

            However more greedy and gullible Nigrians will continue to fall to this simple tricks of the MMM. It has been said the “the dog destined to get missing will not harken the the owner’s whistle”

          • Fred Duke

            Hahahahaha.. Now we’re having a good laugh. Oh gosh! Nigerians can buy human shit in a transparent nylon bag. And they will even introduce it to their friends and family and even in church. I mean human feaces in a transparent bag! Dummies everywhere!

      • Kevin Peter

        Exactly! That’s why this is called Ponzi Scheme, quite different from Digital Currency. There resolve to start collecting bitcoin is simply to prevent he government from freezing their account. Digital currency does not involve intermediaries like banks where government can close down or freeze accounts.