MMM: SEC warns against investment in digital currencies

MMM: SEC warns against investment in digital currencies

Friday, January 13, 2017 11:32 pm


 MMM’s website describes the scheme as a circular system where members ‘give help by transferring the money to each other directly’ (Screengrab)

MMM’s website describes the scheme as a circular system where members ‘give help by transferring the money to each other directly’ (Screengrab)

The Securities and Exchange Commission (SEC) has warned Nigerians against investing in digital currencies such as Bitcoin, Swisscoin and OneCoin.

In a public notice on its website, SEC warned that none of the individuals or companies promoting the use of the currencies is recognised by it or any other regulatory agency in Nigeria.

It also warned that investors stand the risks of losing their money in various investments being promoted by the companies, including fraudulent pyramid schemes.

The warning coincided with the return of popular Ponzi scheme, MMM Nigeria.

MMM Nigeria which had on 23 December placed a suspension on all withdrawals had on resumption said bitcoins will now be part of its part of its payment options, because of the digital currency’s steady growth in value

While warning the public to be cautious of digital currencies as a vehicle of investments, SEC said, “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.

“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.”

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