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SEC Warns Investors against Bitcon, Others

By Modupe Gbadeyanka

Nigerian Investors have been warned to be very careful of advertisements encouraging them to invest in cryptocurrencies such as Swisscoin, OneCoin, Bitcoin and such other virtual or digital currencies.

Making this warning is the Securities and Exchange Commission (SEC), which said members of the public must “exercise extreme caution with regard to digital (crypto currencies) as a vehicle of investments.”

In a statement posted on its website, the capital market regulator noted that “this warning is in consonance with similar warnings issued by capital market regulators and Central Banks across the world over the past few years.”

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SEC said it “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.”

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It further said “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.”

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SEC warned that, “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.”

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Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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