The Nigerian Securities and Exchange Commission (SEC) has issued a warning to citizens: steer clear of cryptocurrencies. In an announcement on Monday, the regulator said that, though not illegal, digital currency investments are “extremely risky and highly speculative.” According to the SEC, these investments are frequently used for fraudulent purposes, and the agency warned of the potential for significant losses.
The Economic and Financial Crimes Commission of Nigeria (EFCC) is the latest body to warn about the risks of investing in cryptocurrencies. In a public warning, the law enforcement agency states that investing in cryptocurrencies is a high-risk activity because it is largely unregulated and susceptible to fraud.
According to a report quoting the EFCC spokesman, Wilson Uwujaren, the law enforcement agency is alarmed by the rate at which Nigerians are sending it petitions on fraudulent investments. The spokesperson also laments that cryptocurrency fraud continues to spread despite the law enforcement and education efforts of the Commission and other stakeholders.
Nevertheless, Mr Uwujaren urged the Nigerian investment community to be more cautious in their investment decisions. He said:
While the EFCC will continue to investigate and prosecute those involved in fraudulent investment schemes, it is the duty of the investing public to be cautious in their investment decisions.
With this warning, the EFCC joins the Central Bank of Nigeria (CBN) in publicly warning Nigerians against trading in cryptocurrencies. In his warning earlier this year, Godwin Emefiele, the head of the CBN, went so far as to say that cryptocurrencies had no place in Nigeria’s monetary system. He also stated that crypto transactions should not be conducted through the Nigerian banking system.
Similarly, some members of the Nigerian state have spoken out against the use of cryptocurrencies in the country. One of the senators, Sani Musa, said bitcoin has made our currency almost useless or worthless.
However, despite increasing warnings and negative comments from regulators, the use of cryptocurrencies in Nigeria continues to increase. For example, Bitcoin.com News recently reported that bitcoin trading volume in Nigeria increased in the first quarter of 2021. The growth in volumes took place despite the CBN’s February 6 directive disconnecting cryptocurrency traders from the country’s banking system.
It remains to be seen whether the EFCC’s warning will change the public’s attitude towards cryptocurrencies.
What do you think of the EFCC’s warning against investing in cryptocurrencies? Tell us what you think in the comment section below?
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