Nigerians should avoid bitcon, forex dealing, and other high-risk investments, according to the Economic and Financial Crimes Commission (EFCC).
With over $500 million worth of Bitcoin traded in the last five years, Nigeria has the world’s second largest Bitcoin sector.
The EFCC has expressed concern about the number of petitions it receives from Nigerians alleging fraudulent investments that offer a high return with little risk to investors.
Despite the commission’s and other stakeholders’ compliance and public education efforts, investment scams that offer returns that seem too good to be true continue to thrive, according to the anti-graft body.
He said, “Though risk-taking is considered by some as the oxygen that drives investment decisions, the commission wishes to warn the public against taking unmitigated risk in desperation to earn a windfall.
“Investment in Bitcoin, for instance, is a high-risk activity as the terrain is largely unregulated and prone to fraud.”
Warning against illicit bitcoin transactions, the commission stated: “The EFCC wishes to state that, while it will continue to investigate and prosecute persons complicit in fraudulent investment schemes, it is incumbent on the investing public to be circumspect in their investment decisions.
“Any investment that promises returns that look too good to be true should be considered a red flag.
“Nigerians are by this notice warned to be wary of fraudulent schemes and are hereby enjoined to resist the temptation of quick gain that could end in misery. Those who ignore this advisory, do so at their own risks.”
The Nigerian monetary authorities had earlier this year expressed reservations about the use of cryptocurrencies, saying they are issued by unregulated and unlicensed entities and as such, its use in Nigeria contravened existing law as they are not legal tender.
The Central Bank of Nigeria (CBN) had on February 5, 2021 written to banks and other financial institutions, stating that dealing in cryptocurrencies and facilitating payment for cryptocurrency exchanges are prohibited.
The CBN further directed all banks and other financial institutions to identify individuals or entities that transact in cryptocurrency or operate cryptocurrency exchanges and close the accounts of such persons or entities.
The apex bank’s directive however sparked negative reactions, with many Nigerians expressing worry about the potential negative effect it could have on the country’s growing cryptocurrency market and innovation in the fintech industry.
In a swift reaction, the CBN issued a statement explaining its earlier directive and providing reasons for its prohibition of cryptocurrency transactions by banks and other financial institutions.
But Vice President Yemi Osinbajo disagreed with the apex bank, saying instead of prohibiting digital currencies, they should be regulated.
“There is a role for regulation here. And it is in the place of both our monetary authorities and SEC to provide a robust regulatory regime that addresses these serious concerns without killing the goose that might lay the golden eggs. So, it should be thoughtful and knowledge-based regulation, not prohibition,” Osinbajo said while speaking at the bankers committee meeting in Lagos on February 26 this year.