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The Economic and Financial Crimes Commission (EFCC) cautions Nigerians against Bitcoin, forex trading, and other financial investments.

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Three months after Nigeria’s central bank restricted financial institutions from dealing with crypto-related companies and securities, The Economic and Financial Crimes Commission (EFCC) has warned Nigerians against what it described as an investment that promises returns that look too good to be true.

EFCC spokesman, Wilson Uwujaren, who gave the warning in Abuja, said “Though risk-taking is considered by some as the oxygen that drives investment decisions, the commission warns the public against taking an unmitigated risk in desperation to earn a windfall.

“Investment in Bitcoin, for instance, is a high-risk activity as the terrain is largely unregulated and prone to fraud,” the anti-graft agency said.

The commission was alarmed at the rate at which Nigerians send petitions to the anti-corruption agency on fraudulent investments that promise a high return with little risk to investors.

According to the EFCC, Nigerians are losing money to Ponzi schemes, forex trading, and most recently, Bitcoin trading, compounding the nation’s economic woes. The EFCC spokesman indicates that investment scams continue to thrive despite enforcement and public enlightenment interventions by the commission and other stakeholders.

The benefits of cryptocurrency trading in the economy of Nigeria cannot be overlooked, Cryptocurrencies and the Foreign exchange market has accelerated and established multiple sources of revenue for average Nigerians.

There is a notable constructive impact of cryptocurrency that the Nigerian Government has not taken cognitive recognizance to, they include:

  • No need for central regulations like banks or governments. Lower transaction fees, fast processing of payments gives power in the hands of the common man. They can do person-to-person (P2P) transactions all around the world in seconds without paying hefty charges to banks.
  • Anonymity is one of the important advantages provided by cryptocurrency. Encryption in the blockchain ledger gives you a hidden identity. Not affected by government actions like DEmonetization, inflation adjustment, etc. which control the value of fiat currencies.
  • It is in digital form so that it can be carried away anywhere without fear of theft, robbery. You only need to store it in your wallet and you have to remember the keys that are it.
  •  Millions of trees can be saved by not using paper currencies. It can help in making our environment safe.
  • With cryptocurrency, you are in charge. No one can take your money away from you unless you lose it yourself. It still has a long way ahead before it can replace cash and credit cards. People are still not aware of what Cryptocurrency is, which makes it a less viable option for them to go for.

The benefits of cryptocurrencies for the global economy are speculated to range from lower transaction fees for the online exchange of money, to increased protection from identity theft due to the secure nature of cryptocurrencies.

It is also assumed that cryptocurrencies will help break down the barriers to finance in developing nations like Nigeria. For example, cryptocurrencies could easily be accessed via mobile phones in countries without banking infrastructure.

Cryptocurrency demand is relatively new, it has experienced significant volatility due to huge amounts of short-term speculative interest. For example, between October 2017 and October 2018, the price of bitcoin rose as high as $19,378 and fell to lows of $5851. 

The volatility of cryptocurrencies is part of what makes this market so exciting. Rapid trade and increase by price movements can provide a range of opportunities to traders to go long and short but also come with increased risk.

So, if you decide to explore the cryptocurrency market, make sure that you have done your research and developed a risk management strategy.

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Data Scientist, Tech Enthusiast and a Crypto Lover