Nigerian government is going after unregistered crowdfunding platforms, and have warned that anyone dealing with the illegal companies will lose their money during the crackdown.
According to the capital market regulator, Securities and Exchange Commission (SEC), there are crowdfunding investment companies operating in the country without license.
The regulator warned investment companies that are not operating to swindle Nigerians and other investors to approach the Securities and Exchange Commission to obtain authorisation for their operation.
In recent years, crowdfunding investment platforms have become a popular channel for investors to grow their wealth, as the firms offer mouth-watering returns on investment.
About three million Nigerians lost N18 billion to popular investment platform, MMM, in 2016, leading to the discovery that it was a ponzi scheme. And in the last six years, about N300 billion has been lost by Nigerians to various ponzi schemes, according to a report by The Guardian.
Assets like agric produce, tech startup stocks, amongst others are offered as revenue making investment opportunities by digital companies; some of which are registered, and also unlicensed.
SEC advised Nigerians to make their findings before investing in such asset, and ensure the investment platforms are registered with the capital market regulator.
In its warning, Nigerian SEC said, “The Commission by this circular hereby notifies the general public and operators of unregistered crowdfunding platforms, that operating any crowdfunding platform that is not registered by the Commission is illegal and may lead to prosecution of such operators and loss of investment by their clients.”