The Security and Exchange Commission (SEC) said it is supporting a new committee to police the proliferation of scam activities in the blockchain industry.
The Anti-Scam Task Force inaugurated by the Blockchain Industry Consortium at stakeholders meeting with the commission on 17 January, is made up of nine members drawn from the Cryptographic Development Initiative (CDIN), Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), and Blockchain Nigeria User Group (BNUG).
The SEC has since 2020 expanded its regulatory net to include the blockchain market in Nigeria with the release of a document where it designated cryptocurrencies as securities. Prior to the document, the commission had moved against InksNation, a platform that claims it invented a philanthropic blockchain platform that can end poverty in any country in less than 9 months. Other claims include inventing the world’s first reserve cryptocurrency called PinKoin and Africa’s first QR debit card called Pinkard.
The SEC statement did little to stop Nigerians from using the Inksnation’s platform. The founder of Inksnation, Omotade-Sparks Amos Sewanu, was later declared wanted by the Economic and Financial Crimes Commission (EFCC) over alleged cryptocurrency fraud of N32 million ($82,000).
Read more Nigerians still flock to Inksnation 3 months after scam warning from SEC
“Every technology has its own backpass. That of crypto is that people will come and tell you to bring this much and you will get this much in return. They use buzzwords like mining which is not possible here in Nigeria because mining requires a lot of electric power. It is not done here in Nigeria. You can’t mine bitcoin using the cloud technology,” Rume Ophi, founder of Cryptopreacher Blockchain Academy said.
The anti-scams task force has ten mandates some of which include checking the proliferation of blockchain and crypto scams in the country with support from the SEC by determining the litmus test for blockchain and crypto-based scams in relation to securities and investment within the regulatory purview of SEC; identifying the typos of blockchain – and crypto-based scams in Nigeria in relation to securities and investment within the regulatory purview of SEC; identifying the negative effects of blockchain- and crypto-based scams in Nigeria on the blockchain industry and the Nigerian economy; identifying how blockchain – and crypto-based scams promoters operate in Nigeria, and identifying the role of education in the fight against blockchain and crypto-based scams.
“Following the Securities and Exchange Commission’s (SEC) engagement with the Nigeria blockchain industry on the proliferation of blockchain and crypto scams in the country, stakeholders in the industry have decided to come together to set up a blockchain consortium with special Anti-Scam Task Force to make recommendations to the SEC,” Lucky Uwakwe, CEO of Sabi Exchange and chairman of the new task force said.
