The best shield against investment scams is knowing the red flags. First, don’t ever believe an opportunity that promises lucrative returns in a short period of time with no risk. Yes!… Investing doesn’t work that way. To ensure your money is going to the right place, you must get off your comfort zone and research opportunities that come your way.
Know this and know peace…
Besides Ponzi schemes and pyramid schemes, keeping your eyes unwrapped for other investing-related ploys is very important. If not for anything else, note that joining these “get-rich-quick” schemes will likely result in a lot of wasted time and money.
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Yes, they will make big promises, apply high-pressure sales strategies, or guilt you into making a hurried decision. Stand your ground. Experts believe you must check the operators credentials and get a second opinion from a licensed financial or investment professional before sending money or giving out your personal information.
Note that like Ponzi schemes and pyramid schemes, scammers lure victims through unsolicited phone calls, text messages, fraudulent emails, phony online advertisements, and more.
They also demand you send money or they will dangle the prospects of considerable returns to get you to pay for useless courses.
Fraudsters for example may impersonate legal operators just to get that maximum attention they want from you. Nigeria’s Securities and Exchange Commission (SEC) has lately been exposing many of these illegal operators while also warning investors to avoid them.
The influx targeted at uninformed public…
CMTrading
The SEC said its attention has been drawn to the activities of an online platform known as CMTrading, which holds itself out as a cryptocurrency and commodities trading platform.
SEC noted that the platform claims to be licenced as GCMT South Africa Pty Limited by the Financial Sector Conduct Authority (FSCA) of South Africa and as a securities dealer by the Financial Services Authority (FSA) of Seychelles.
The platform uses cloned websites of reputable media houses – to attract unsuspecting victims. It also posts cloned videos and pictures of prominent Nigerians on social media, promising monetary benefits to subscribers.
As a result, the Commission has informed 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.
“Investigations have revealed that CMTrading’s operations exhibit the typical indicators of a fraudulent Ponzi scheme, including the promise of unusually high returns, heavy reliance on a referral system to sustain pay-outs and desperate requests for subscribers to fund accounts. Accordingly, the public is advised to be cautious about investing with CMTrading, as any person who engages with the entity or its representatives does so at his/her own risk,” the SEC said in a June 16 notice.
The Commission similarly reminded potential investors of the need to verify the registration status of investment platforms via the Commission’s dedicated portal: https://home.sec.gov.ng/fintech-and-innovation-hub-finport/registered-fintech-operators or www.sec.gov.ng/cmos before transacting with them.
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Sapphire Scents Limited
Also, the Securities and Exchange Commission said that its attention has been drawn to the activities of Sapphire Scents Limited which holds itself out as an Investment Adviser/Fund Manager promoting an unregistered investment scheme. The Commission informed the public that Sapphire Scents Limited is not registered to operate in any capacity in the Nigerian Capital Market.
“Accordingly, the public is advised to refrain from engaging with Sapphire Scents Limited or its representatives in respect of any business in the Nigerian Capital Market, as any person who does so is at his/her own risk. The investing public is therefore reminded to verify the status of companies and entities offering investment opportunities on the Commission’s dedicated portal: www.sec.gov.ng/cmos before transacting with them,” SEC said.
ZugaCoin and Samzuga GPT
The SEC said its attention has been drawn to online publications advertising unauthorised Crypto coins termed ZugaCoin (with variants like SZCB and SZCB2) and Samzuga GPT. The Commission said the promoters or issuers of ZugaCoin and Samzuga GPT are not registered to operate in any capacity in the Nigerian Capital Market, and also ZugaCoin and Samzuga GPT are not approved by the Commission for issuance to the public.
“Preliminary investigations revealed that ZugaCoin and Samzuga GPT are Meme coins. Meme coins generally have no use case, intrinsic value or tangible projects backing them. Any attributed value to meme coin is usually linked to its promoters or the community effort which most often than not are susceptible to pump and dump schemes (a form of fraudulent activity that involves promoters spreading false or misleading information to create a buying frenzy that “pumps” up the price of a ‘coin’ and then “dumps” the coin by selling their own coins at the inflated price. Once the promoters dump their coins and stop hyping the coin, the coin price typically falls and investors lose money),” SEC noted.
“The public is advised to refrain from engaging in the purchase or promotion of ZugaCoin and Samzuga GPT or any of their variants as any person who invests in the scheme does so at his/her own risk. The Commission similarly reminds the investing public of the need to always verify the authenticity of crypto/virtual or digital assets, the registration status of their promoters and trading platforms via the Commission’s dedicated portal,” SEC further said.
Punisher Coin
The SEC has also made reference to several online publications that were advertising an unauthorised presale of Crypto coin termed “Punisher Coin” aka “$PUN”. The Commission told the public that the promoters or issuers of “Punisher Coin” aka “$PUN” are not registered to operate in any capacity in the Nigerian Capital Market, and that Punisher Coin ($PUN) is not approved by the Commission for issuance to the public.
“Preliminary investigations revealed that Punisher Coin ($PUN) is a Meme coin. Meme coins generally have no use case, intrinsic value or tangible projects backing them. Any attributed value to meme coin is usually linked to its promoters or the community effort which most often than not are susceptible to pump and dump schemes (a form of fraudulent activity that involves promoters spreading false or misleading information to create a buying frenzy that “pumps” up the price of a ‘coin’ and then “dumps” the coin by selling their own coins at the inflated price. Once the promoters dump their coins and stop hyping the coin, the coin price typically falls and investors lose money),” SEC had said.
Accordingly, the SEC advised the investing public to refrain from engaging in the purported presale of Punisher Coin ($PUN) “as any person who invests in the scheme, does so at his/her own risk”.
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CBEX (Crypto Bridge Exchange)
The Securities and Exchange Commission had also warned the public to refrain from the activities of CBEX (Crypto Bridge Exchange). CBEX, the latest of the major scammers of the public also operated under the corporate identity of ST Technologies International Limited, Smart Treasure/Super Technology. It held itself out as a digital asset trading platform, offering high returns to investors in Nigeria. CBEX had joined a long list of successful scams in Nigeria, which according to investors, the people behind the digital platform carted away over N1.3 trillion from their wallets after crashing. The Commission clarified that neither CBEX nor its affiliates were granted registration by the Commission at any time to operate as a Digital Assets Exchange, solicit investments from the public or perform any other function within the Nigerian capital market.
“Preliminary investigations carried out by the Commission have revealed that CBEX engaged in promotional activities to create a false perception of legitimacy, in order to entice unsuspecting members of the public into investing monies, with the promise of implausibly high guaranteed returns within a short timeframe. CBEX has failed to honour withdrawal requests from their subscribers and abruptly closed their physical offices, amid mounting complaints.
“Pursuant to the provisions of Section 196 of the Investments and Securities Act 2025, the Commission would collaborate with relevant law enforcement agencies to take appropriate enforcement action against the CBEX, its affiliates and promoters,” SEC stated on April 17.
