Nigerians have been warned against the dangers of investing in cryptocurrencies (digital currencies) such as the Bitcoin, Swisscoin, Onecoin, etc by the Securities and Exchange Commission, SEC.
SEC disclosed that the commission nor any other regulatory agency in the country does not recognize any company(ies) or individual(s) promoting the use of these cryptocurrencies.
The Commission, therefore, stressed the risks and possibility of investors losing their money to such investments being promoted by these companies, of which some may be outright fraudulent pyramid schemes.
The public notice on the commission’s website reads:
“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.”
Just recently, the Nigeria Insurance Deposit Commission, NDIC, in conjunction with the Central Bank of Nigeria, CBN, set up a committee to study the trending “digital currency, ‘bitcoin.
NDIC Managing Director, Alhaji Umaru Ibrahim, said 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.
Cryptocurrencies otherwise known as Digital currencies, are digital currencies in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
Though Cryptocurrency still remains quite a mystery to many people, the steadily growing global currency is becoming more common. The most common type of Cryptocurrency is Bitcoin which became the first decentralized cryptocurrency in 2008.