The Securities and Exchange Commission (SEC) on Friday issued a circular, urging the investing public to exercise extreme caution with regard to Bitcoin, crypto currencies and, other online currencies as a vehicle of investment.
The SEC explained that many of the companies and entities promoting the use of crypto currencies have not been recognized or authorized by the Nigerian regulatory agencies to provide investment and financial services, hence the risk of loss of money and fraud looms.
The apex capital market regulator in its circular thus advised investors to confirm status of any financial institutions authorized by the Commission or other financial services regulatory authority.
According to SEC, “The attention of the Securities and Exchange Commission, has been drawn to radio advertisements and other modes of solicitations of the public to invest in crypto currencies 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 crypto currencies 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.”