The Securities and Exchange Commission (SEC) has issued a strong warning to the Nigerian public, urging extreme caution against investing in several unregistered and unregulated entities posing as legitimate financial service providers.
In a series of public advisories, the SEC identified six firms operating without proper registration and engaging in illegal capital market activities. The commission emphasized that these firms are not licensed to operate in Nigeria, and any involvement with them is done entirely at the investor’s own risk.
Spotting the Red Flags
The commission noted that fraudulent investment schemes often lure unsuspecting Nigerians by offering unrealistic returns, leveraging high-pressure sales tactics, and using cloned websites or endorsements from public figures to gain trust.
Such schemes typically follow Ponzi or pyramid structures, offering enticing but unsustainable profits, only to collapse—leaving investors with significant financial losses.
Firms Identified by the SEC as High-Risk and Unregistered
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CMTrading
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False Licensing Claims: Claims affiliation with South Africa’s Financial Sector Conduct Authority and the Financial Services Authority of Seychelles.
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Tactics: Uses cloned websites and fake endorsements from public figures.
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SEC Verdict: Classified as a Ponzi scheme.
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Sapphire Scents Limited
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Misrepresentation: Operating as an investment adviser/fund manager without SEC registration.
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Warning: Promotes unregulated investment schemes and lacks regulatory oversight.
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ZugaCoin and Samzuga GPT
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Nature: Marketed as meme coins.
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Lack of Substance: No tangible project or intrinsic value; not approved by the SEC.
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Risk: Suspected of pump-and-dump schemes.
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Punisher Coin ($PUN)
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Unlicensed Presale: Promoted without SEC approval or legitimate value proposition.
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SEC Advisory: Public warned to steer clear of all presale engagements.
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TOFRO.COM
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Operator: Managed by ToFro Exchange Global Professional Station.
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Red Flags: Exhibits clear Ponzi characteristics.
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Regulatory Status: Not registered or authorized to operate in Nigeria.
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CBEX (Crypto Bridge Exchange)
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Fraudulent Operation: Disguised as a licensed digital asset exchange.
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Investor Losses: Disappeared with over ₦1.3 trillion in investor funds.
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Clarification: Never registered with the SEC or authorized for crypto operations in Nigeria.
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Investors Advised to Conduct Due Diligence
The SEC stressed the importance of verifying the registration status of any company before committing funds. Investors can check the legitimacy of firms via the SEC’s official website or customer service portals.
Broader Concerns on Fraudulent Entities
In a related development, the Nigerian National Petroleum Company Limited (NNPCL) has also warned the public about impersonators posing as the company in order to defraud foreign investors. The NNPCL emphasized that all legitimate transactions occur solely through official channels, and any suspicious activity should be reported immediately.
Conclusion: Stay Alert, Stay Safe
As fraudulent investment schemes become more sophisticated, Nigerian investors are advised to stay vigilant, question overly attractive offers, and never invest in any firm that is not licensed by the SEC. The cost of negligence can be devastating—not just financially, but emotionally and socially.
