The Nigerian Economic and Financial Crimes Commission (EFCC) has become the latest agency to warn of the risks associated with cryptocurrency investments. In a public warning, law enforcement agencies argued that investment in cryptocurrency “is a high-risk activity because the terrain is largely unregulated and vulnerable to fraud.”

The spread of the scam

According to a report citing EFCC spokesperson Wilson Uwujaren, law enforcement agencies are shocked by the “rate of Nigerians sending petitions to them for fraudulent investments”. At the same time, the spokesperson also complained about the fact that “despite the enforcement and public enlightenment intervention measures taken by the Commission and other stakeholders, the spread of crypto scams”.

However, Uwujaren still urges the Nigerian investment public to be more cautious when making investment decisions. He says:

Although EFCC will continue to investigate and prosecute those involved in fraudulent investment plans, the investing public has a responsibility to exercise caution in its investment decisions.

Regulatory pushback

At the same time, in the case of issuing this warning, EFCC and the Central Bank of Nigeria (CBN) have publicly discouraged Nigerians from conducting cryptocurrency transactions. In a warning earlier this year, CBN Governor Godwin Emefiele even pointed out that cryptocurrency has no place in Nigeria’s monetary system. He also stated that crypto transactions “should not be conducted through Nigeria’s banking system.”

Similarly, some member states of the Nigerian state have also attacked the country’s use of cryptocurrency. A Senator Sani Musa declared: “Bitcoin makes our currency almost useless or worthless.”

However, despite increasing warnings and unfavorable comments from regulators, the use of cryptocurrencies in Nigeria continues to grow. For example, Bitcoin.com News recently reported that Nigeria’s peer-to-peer Bitcoin transaction volume increased in the first quarter of 2021. Although the CBN order on February 6 cut off the number of cryptocurrency traders in the country’s banking system, the volume of transactions is still increasing.

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It remains to be seen whether the EFCC warning will change public perceptions of cryptocurrencies.

What do you think of the EFCC warning on cryptocurrency investment? Tell us what you think in the comments section below?

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