Nigeria’s Economic and Financial Crimes Commission (EFCC) has become the latest body to warn of risks associated with cryptocurrency investments. In a public warning, the law enforcement agency argues that investing in cryptos “is a high-risk activity as the terrain is largely unregulated and prone to fraud.”
Proliferation of Scams
According to a report that quotes Wilson Uwujaren, the EFCC spokesperson, the law enforcement agency is alarmed by “the rate at which Nigerians sent them petitions on fraudulent investments.” Meanwhile, the spokesperson also bemoans the fact crypto scams continue to proliferate “despite enforcement and public enlightenment interventions by the commission and other stakeholders.”
However, Uwujaren still urges the Nigerian investing public to be more careful when making investment decisions. He said:
While EFCC 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.
The Regulatory Pushback
Meanwhile, with this warning, the EFCC joins the Central Bank of Nigeria (CBN) in publicly discouraging Nigerians from dealing or trading in cryptocurrencies. In his warning earlier in the year, Godwin Emefiele, the CBN governor went as far as to state that cryptocurrencies have no place in Nigeria’s monetary system. He also said crypto transactions should “not be carried out through the Nigerian banking system.”
Similarly, some members of Nigeria’s State State have attacked the use of cryptocurrencies in the country. One Senator, Sani Musa claimed that “bitcoin has made our currency almost useless or valueless.”
However, despite the increasing warnings and adverse comments by regulatory bodies, cryptocurrency use continues to grow in Nigeria. For instance, Bitcoin.com News reported recently that Nigeria’s peer-to-peer bitcoin traded volumes had increased in Q1 of 2021. The volumes increase occurred despite a February 6 CBN directive that cut off cryptocurrency traders from the country’s banking system.
It remains to be seen if the EFCC’s warning is going to change the public’s view of cryptocurrencies.
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