The Securities and Trade Fee (SEC) has issued a stern warning relating to two cryptocurrency merchandise—Zugacoin and Samzuga GPT—stating that they don’t seem to be licensed to function inside Nigeria’s {financial} market.
In an official assertion on Wednesday, the fee disclosed that it grew to become conscious of on-line promotions promoting Zugacoin, together with variants corresponding to SZCB and SZCB2, alongside Samzuga GPT.
SEC clarified that these digital belongings lack regulatory approval and are unauthorized for issuance or buying and selling inside the nation.
“The fee hereby informs the general public that the promoters or issuers of Zugacoin and Samzuga GPT will not be registered to function in any capability within the Nigerian capital market, and in addition Zugacoin and Samzuga GPT will not be permitted by the fee for issuance to the general public,” the assertion emphasised.
Following a preliminary investigation, SEC decided that each belongings fall below the class of meme cash.
The fee defined that meme cash usually lack an outlined use case, intrinsic worth, or a tangible challenge supporting them. As an alternative, their worth is commonly linked to neighborhood hype and promoters’ affect, making them susceptible to manipulative market schemes.
SEC highlighted the dangers related to “pump-and-dump” schemes, a fraudulent exercise the place promoters artificially inflate the worth of a coin by way of deceptive advertising and marketing, prompting keen traders to purchase in. As soon as costs peak, the unique promoters dump their holdings, resulting in a pointy decline in worth and {financial} losses for unsuspecting traders.
The SEC cautioned Nigerians in opposition to participating in Zugacoin and Samzuga GPT investments, urging them to conduct due diligence earlier than placing cash into digital belongings.
“Accordingly, the general public is suggested to chorus from participating within the buy or promotion of Zugacoin and Samzuga GPT or any of their variants as any one who invests within the scheme does so at his or her personal threat,” the fee warned.
To safeguard traders, the SEC suggested people to confirm the legitimacy of cryptocurrency platforms and digital belongings through the fee’s devoted portal earlier than making {financial} commitments.
