Nigeria SEC warns against unregistered crypto platform

Nigeria’s Securities and Exchange Commission (SEC) has issued a warning to the general public regarding the CMTrading trading platform. According to the regulatory agency, the platform is unregistered and as such is not fit to offer trading or financial services to residents in the country.

In its statement, the Commission said that the platform reportedly claims to be affiliated with GCMT South Africa Pty Ltd, which is allegedly licensed by the Financial Conduct Authority (FSCA) of South Africa and the Financial Services Authority (FSA) of Seychelles as a securities dealer.

The Nigerian SEC also said that the platform, which has been offering crypto and commodities trading services, also cloned websites of media outlets like Punch, Vanguard, and Arise Television, attracting unsuspecting users.

Nigeria SEC issues warning against CMTrading

According to the SEC, the alert was necessary over concerns of a rise in fraudulent activities in Nigeria’s capital market. The commission said that aside from using cloned versions of these websites to attract users, it also uses fake videos of prominent Nigerians praising its platform on social media, promising monetary benefits to subscribers,” the agency said.

The SEC mentioned that the platform was not registered to solicit investments from the public or operate in any capacity within the Nigerian capital market.

“The Commission hereby informs the public that the CMTrading is NOT REGISTERED by the Commission either to solicit investments from the public or operate in any capacity within the Nigerian capital market,” the statement read.

In addition, the SEC mentioned that investigations showed that CMTrading’s mode of operation exhibited signs of a Ponzi scheme. The commission highlighted that the platform usually promises its Nigerian users an unusually high amount of returns, noting that it also relies on a form of referral system to sustain payouts.

The agency said it also employed the use of fake websites and proof of investments to entice users into making investments.

The agency wants the public to be cautious

In its statement, the Nigerian SEC advised the public to be cautious about investing with CMTrading, noting that anyone engaged with the entity or a representative of the platform does so at their risk. The agency also warned users to check the registration status of any investment platform on its official verification website, drumming up the need for users to protect themselves from fraudulent elements.

It urged the public to use these official verification portals: https://home.sec.gov.ng/fintech-and-innovation-hub-registered-fintech-operators, and https://www.sec.gov.ng/cmos.

This is not the first warning the SEC has issued to the general public in the last few weeks. Last week, the SEC also issued a warning against an unregistered crypto project known as Punisher Coin ($PUN), describing it as a meme coin with no real-world use.

The SEC mentioned that the Punisher Coin fit the normal pattern of tokens associated with pump-and-dump schemes, where investors are lured in with the promise of making money through hype and left with worthless assets after the developers might have pulled liquidity, leading to the token crashing.

The coin was said to have been marketed through unauthorized means, with the developers using an aggressive online promotion to target unsuspecting Nigerian investors.

Nigeria has been making moves to combat unregistered platforms and projects while carrying out actions against illegal operators. For instance, the EFCC recently finalized a case where it charged some foreign nationals accused of carrying out crypto investment scams in the country. The foreign nationals were imprisoned for a year each, with the court ordering them to pay one million (approximately $645) in fines.

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