SEC warns against investment in Bitcoin, Swisscoin, others

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LAGOS, JANUARY 13, 2017 – The Securities and Exchange Commission, SEC, has warned Nigerians against the risk involved in investing in digital currencies such as Swisscoin, OneCoin and Bitcoin, as vehicles of investment.

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

Such digital currencies, otherwise known as Cryptocurrency, is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Bitcoin became the first decentralized cryptocurrency in 2009.

The Commission, therefore, said such investments been promoted by the companies could be risky with possibility of loss of money by investors, while others could be outright fraudulent pyramid schemes.

“Given that these instruments and the persons, companies or entities that promote the digital currencies 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.,” it said.

It would be recalled that the Nigeria Insurance Deposit Commission, NDIC, in conjunction with the Central Bank of Nigeria, CBN, had recently set up a committee to study the trending “digital currency, ‘bitcoin.

According to Alhaji Umaru Ibrahim, Managing Director, NDIC, the Commission would look at the advantages and disadvantages of the currency and what it means for the payment system in Nigeria as well as safety and security of customers

“We will also look at what it means for money laundering, anti corruption, crime and measurement of money /near money instrument for the economy. But we need a lot of education to do this and I am calling on you (media) to educate yourselves about all of this so you can educate the public,” he said.

He said that a lot of Nigerians have already started patronising bitcoin, stressing that ‘it had started to creep in and nobody could stop it.

He said that in Europe and the United States, it has gained ground and some of the leading banks in Europe have also adopted their own versions of bitcoins.

“Some of the central banks have also adopted it and are seriously doing everything possible to bring in the emergence of these invisible products,” he added.

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