Economy
What You Need to Know About Online Trading Scams
Even before the advent of the internet, traders were getting scammed. Today, these scammers reach a wider audience because of the internet and do so with more anonymity.
Nigeria is witnessing an upsurge in online payment usage, and according to CBN e-Payment Statistics, Nigerians executed about 16 billion online transactions in 2021, and it increased to 22 billion in 2022.
As more Nigerians embrace online trading and use e-payments as ways to fund their trading accounts; scammers are also perpetrating scams online which target these traders relying on the speed & anonymity of the internet; where they can pose as a fake brokerage company or an expert trader using a fake social media persona, professional looking website & email to take away money using fast & anonymous online payment methods.
Unregulated Entities and Scammers Posing as Brokers
Among the most common trading scams is the unregulated persons and entities posing as brokers. The legality of a broker is based on its regulatory status with the appropriate government authorities.
In Nigeria, the Securities and Exchange Commission (SEC) is responsible for registering and regulating capital market operators, which includes online brokers and securities and commodity exchanges.
You can confirm whether an investment provider is registered by SEC by visiting the SEC website and clicking on “Capital Market Operator Search”. Additionally, for stockbrokers, you can visit the NGX stock exchange website and click on ‘Find a Broker’.
An online broker that is not registered by SEC or is not a member of the SEC-authorized exchange is most likely a scam or is unregulated or unsafe.
Reports have shown that many Nigerians still engage in alternative and unconventional investments such as cryptocurrency, CFDs forex trading, which are still unregulated, leaving a grey area to be exploited by bad players.
Cryptocurrency investments had recently been banned in Nigeria while Forex trading is still unregulated by SEC but is not illegal; this poses investment risks for traders as these instruments lack regulatory oversight.
SEC had issued a Public Warning on Retail Online Forex Trading in Nigeria, saying forex trading is not regulated by them, and you do so at your own risk.
Due to this absence of regulation in CFD and Forex Trading space, Nigerian traders need to ensure that the foreign forex brokers they deal with are under relevant regulations in their home countries.
When dealing with foreign brokers, it is important to note that not all foreign regulators are of the same calibre. The regulators in developed economies, such as the Financial Conduct Authority (FCA) of the UK, and ASIC of Australia, are often regarded as Tier-1; and are considered safest due to their strong investor protection, regulation and oversight. Many brokers have faced harsh penalties from FCA and ASIC for not following rules. So, traders can be sure that the tier-1 regulated broker will not engage in bad practices and will offer services as per the directives of the regulators.
But if you see brokers regulated in Island nations like the Bahamas, Saint Vincent & The Grenadines, Mauritius, etc. You need to beware as these countries have weaker regulatory laws and are not Tier-1 or Tier-2 regulators. So, there is a high possibility brokers under these regulations will likely engage in fraudulent activities flouting rules, and you would have no regulatory discourse or action to recover your funds in case of wrongdoing by the broker. So, any broker below tier-1 or tier-2 regulation must be avoided.
Africa too has reputed tier-2 regulators like FCSA of South Africa and CMA of Kenya that offer similar investor protection, regulations at par with FCA, ASIC to CFD & Forex Traders. According to this research into forex brokers in South Africa, there are 8 forex brokers that accept traders from the African continent and hold multiple regulatory licenses, including Tier-1 & Tier-2 licenses.
These days foreign brokers get multiple regulators across the globe to license them, and the more regulators, the safer these brokers are.
You still need to confirm their regulatory status by visiting the foreign regulators’ website and viewing the list of licensed financial service providers.
In summary, a broker that is not registered by the Nigerian SEC or is not a member of an authorized exchange like NGX and also is not registered by multiple international regulators is operating illegally and is most likely a scam. You should avoid trading with such online brokers.
Many Scams Originate from Social Media & Dating Sites
Online trading scams through social media take different forms. Fraudsters can impersonate legitimate brokers or pose as legitimate investment advisors and create a fake profile and webpage to accompany it.
They then convince unsuspecting online traders to trade via their platforms or invest in markets via them; if you send money to them, it is gone.
Sometimes, you can be asked to keep sending money to them until you realize it is a scam. You can prevent this by only following verified company handles on social media and carrying out proper background checks on the website before investing. You can also verify Broker’s genuine website from Regulator or Exchange’s website. Most regulators and exchanges list the official websites and contact details of their licensed brokers.
Trading scams on social media can also take the form of romance. Here, the scammer creates a fake profile on dating apps, seeking a romantic relationship with you.
At some point in the relationship, you are introduced to a fake investment scheme with the promise of high returns. It could be forex, stocks, crypto, etc.
You will be encouraged to keep investing funds, but when you ask to withdraw your winnings, you will be met with excuses such as you need to pay taxes, you need to invest for a certain number of years before you can withdraw, etc. This goes on till you give up trying.
Online trading scams via social media can also take the form of a pump and dump scheme, where the scammers create a social media frenzy on platforms like Twitter, Facebook, Youtube, ticktok or Reddit about a particular stock (usually penny stock), falsely claiming its price is about to explode. A scammer would usually pose as a market expert offering legitimate research, investment calls, insight or some insider information, causing mass sharing viral effects on social media.
This frenzy makes a lot of people buy the stock, thereby increasing its price. The scammers would then immediately sell off huge volumes of the stock, causing its price to fall and leaving other buyers with worthless stock.
You can prevent this by avoiding securities with unusual social media buzz.
Scams Can Hide Behind Celebrity Endorsements
Celebrities, community leaders, influencers, or even religious leaders can unknowingly promote online trading scams.
Scammers understand that you hold these figures in high esteem, and most likely believe any information from them.
Today with the trend of brand ambassadors, some online influencers promote suspicious brands in order to get a paycheck. Celebrities, influencers, & skit makers are not qualified to give investment advice. Always confirm all investment offers from the SEC website before you deal.
Scammers May Pay You Initial Returns to Win Your Trust
Scammers sometimes pay your profits for your first investment. This gives you the illusion that they are legit and prompts you to commit more funds.
This is the classic Ponzi scheme style where the earlier investors get paid with the money of the later investors. Once you commit substantial funds, you are blocked from withdrawing any more money, and when you insist, the scammers cut off communication.
Scams Downplay Risks and Emphasize High Rewards
Online trading comes with risks of losing, and no matter how knowledgeable you are, you cannot avoid them. Even the best traders in the world only have a 6 out of 10 win rate. It is, therefore, important that your broker keeps you informed of the risks in online trading.
If your broker sugarcoats online trading and downplays or completely ignores the risks, you should be suspicious.
Also, if a broker lays great emphasis on huge returns to be made via online trading, he is likely to be a scam too.
Scams May Send You Malicious Links to Download Trading Apps
You risk downloading the fake version of a trading app if you download it from unknown sources.
Google Play Store and Apple Store are the safest places to download because they scrutinize the apps for any malware and carry out regular scans to ensure the apps are not infected.
A reputable online broker will host his trading app on either the Google Play store or the iOS app store. This is not to say Google Play store or the iOS app store are immune to fake apps, but the chances are lower.
Scammers may also send you Android Package Kit (APK) executable files to download the app, and this too is dangerous as it can contain hidden malware.
Request to Deposit Funds Via Malicious Payment Links
A payment link enables the creator to receive payments from others without the hassle of building a website and integrating a payment gateway.
They usually exist as URLs, QR codes, etc. It is common for businesses to send payment links via apps and SMS.
Scammers could impersonate a legitimate broker, but at the point of payment, a link is sent to you, and the money goes to the scammer instead.
Things to Remember
Online scammers can be very professional and build good-looking websites. They are part of a global organized crime ring, hence their sophistication.
They have even gone as far as using deep fake technology for video calls so that they can impersonate even people close to you.
They target everyone, even you in Nigeria, as far as there are gains to be made. This is why you must ensure you carry out a background check on the broker and ensure there is no red flag before trading with an online broker.
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has warned that Nigeria’s economic recovery could come under renewed pressure from persistently high borrowing costs and inflation despite stronger crude oil production and ongoing economic reforms.
In its July Monthly Oil Market Report, OPEC said Nigeria’s near-term economic outlook remains positive, supported by higher oil production, improving macroeconomic stability, stronger business activity and continued reform efforts, but cautioned that inflationary pressures and expensive credit continue to pose significant risks to sustained growth.
According to the report, Nigeria’s economy expanded by 3.9 per cent year-on-year in the first quarter of 2026, marginally below the 4.0 per cent recorded in the final quarter of 2025, indicating that growth has remained close to recent highs.
“Overall, Nigeria’s near-term outlook remains positive, supported by oil production, reform progress, infrastructure investment and stronger business activity, but high inflation, elevated borrowing costs and the need to preserve exchange-rate stability remain important challenges,” OPEC stated.
The organisation noted that the non-oil sector remained the principal driver of economic expansion, with agriculture, manufacturing, construction, trade, finance and insurance contributing significantly to growth.
It added that improved crude oil production had strengthened government revenues, boosted foreign exchange inflows and reinforced the country’s external reserves.
“The non-oil economy continues to provide the main support, with activity driven by agriculture, manufacturing, construction, trade, and finance and insurance, while higher oil output has improved fiscal revenues, foreign-exchange inflows and external buffers. Survey indicators also point to continued near-term momentum,” the report added.
OPEC also pointed to private sector data showing continued expansion in business activity. It said the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) moderated slightly to 53.4 in June from 54.1 in May but remained above the 50-point threshold, indicating sustained growth in economic activity.
According to the report, stronger output, increased new orders and resilient consumer demand continued to support business expansion, although manufacturing activity softened slightly during the review period.
The oil producers’ group further noted that increased domestic refining capacity, particularly the improved fuel supply from the Dangote Refinery, is expected to strengthen energy availability and ease pressure on imports.
“Higher domestic refining capacity, including improved fuel supply from the Dangote refinery, should continue to support energy availability and reduce some import-related pressures,” OPEC said.
Despite the positive outlook, the organisation expressed concern over rising consumer prices, noting that Nigeria’s inflation rate increased to 15.9 per cent in May from 15.7 per cent in April as food prices continued to weaken household purchasing power.
“Inflation rose further to 15.9 per cent year-on-year in May, up from 15.7 per cent in April, with food prices still putting pressure on household purchasing power. This means that monetary policy is likely to remain cautious, despite improved exchange-rate stability and stronger oil-related inflows,” the report stated.
OPEC said the persistence of inflation is likely to keep monetary policy tight, meaning borrowing costs may remain elevated even as improved oil earnings continue to strengthen Nigeria’s fiscal position and external reserves, adding that balancing price stability with economic growth will remain a key challenge for policymakers in the months ahead.
By Adedapo Adesanya
Central Securities Clearing System (CSCS) Plc bested three price decliners to lift the NASD Over-the-Counter (OTC) Securities Exchange by 0.05 per cent on Thursday, July 16.
The securities depository company gained N2.29 during the trading day to close at N92.64 per share compared with the previous day’s price of N90.35 per share.
As a result, the market capitalisation of the bourse grew by N1.42 billion to N2.592 trillion from N2.590 trillion, while the NASD Security Index (NSI) improved by 2.36 points to 4,318.87 points from 4,316.51 points.
The three price losers yesterday were led by 11 Plc, which shed N10.00 to end at N240.00 per unit versus Wednesday’s closing value of N250.00 per unit, FrieslandCampina Wamco Nigeria Plc lost N2.34 to finish at N147.66 per share compared with the N150.00 per share it closed at midweek, and Food Concepts Plc depleted by 7 Kobo to settle at N2.42 per unit, in contrast to the preceding day’s N2.49 per unit.
A look at the activity chart showed that during the session, the value of transactions soared by 43.3 per cent to N104.1 million from the preceding session’s N65.2 million, and the number of deals jumped by 39.3 per cent to 39 deals from the 28 deals completed a day earlier, while the volume of trades contracted by 75.7 per cent to 1.2 million units from 4.8 million units.
When trading activities ended for the day, Great Nigeria Insurance (GNI) Plc led the activity chart as the most active stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 74.9 million units exchanged for N5.3 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Adedapo Adesanya
The Naira further appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, July 16, by 65 Kobo or 0.04 per cent to sell for N1,381.53/$1, in contrast to Wednesday’s closing value of N1,382.18/$1.
This was buoyed by improved FX liquidity to absorb the high demand for Dollars during the trading session.
However, the local currency depreciated against the Pound Sterling in the official market yesterday by N9.48 to close at N1,866.17/£1 versus the preceding day’s N1,856.69/£1, and lost N2.99 against the Euro to quote at N1,582.68/€1 compared with the midweek rate of N1,576.69/€1.
At the parallel market, the Nigerian currency maintained stability against its United States counterpart at N1,405/$1, and at the GTBank FX desk, it remained unchanged at N1,389/$1.
On Thursday, data from the Central Bank of Nigeria (CBN) showed a surge in interbank FX turnover and deal count. Interbank FX activities at the NFEM window increased sharply by 69 per cent to $205.366 million from $121.727 million reported the previous day.
Nigeria’s gross external reserves continue to rise, supported by steady foreign exchange inflows from hydrocarbon receipts, remittances and foreign portfolio investments, boosting market confidence. It settled at $51.893 billion from $51.867 billion the previous day.
The apex bank has also launched a new digital platform that will track every foreign exchange transaction involving Bureau De Change (BDC) operators, marking a major step in its efforts to improve transparency and strengthen oversight of Nigeria’s retail forex market.
In an operational guidance issued on July 15 to authorised dealer banks and licensed BDCs, the CBN introduced the FX BDC Purchase Tracker (FXBT), a centralised electronic portal that will monitor foreign exchange purchases by BDCs from the point of request through approval, settlement and eventual sale.
As for the crypto market, prices were down as the markets weighed fresh US airstrikes on Iran that boosted risk sentiment, with Ethereum (ETH) down by 4.7 per cent to $1,829.37.
Solana (SOL) decreased by 3.6 per cent to $77.49, Dogecoin (DOGE) depreciated by 3.1 per cent to $0.0718, Cardano (ADA) also crashed by 3.1 per cent to $0.1588, Bitcoin (BTC) slumped by 2.9 per cent to $62,820.21, Ripple (XRP) dipped by 2.6 per cent to $1.08, Binance Coin (BNB) fell by 2.3 per cent to $569.02, and TRON (TRX) shrank by 0.8 per cent to $0.3219, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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