The Securities and Exchange Commission (SEC) has warned investors about the activities of unregistered investment crowdfunding platforms.
Crowdfunding is the process of raising funds to finance a project or business from the public through an online platform.
The commission said this in a recent circular.
SEC said it has observed with concern the fraudulent activities of some unregistered investment crowdfunding platforms.
It advised investing public against making investments with or through any crowdfunding platform not registered with the commission.
The commission also urged well-intending crowdfunding platforms to register and comply with the rules.
“The Commission by this circular hereby notifies the general public and operators of unregistered crowdfunding platforms, that operating any crowdfunding platform that is not registered by the Commission is illegal and may lead to prosecution of such operators and loss of investment by their clients,” the statement reads.
“Members of the public are further advised to confirm the registration status of any entity soliciting their participation in any investment scheme by contacting the Commission through its website: sec.gov.ng, e-mail: [email protected], Phone no: 09-4621168.”
In January 2021, SEC published crowdfunding rules for the capital market and the need to protect investors through effective regulation.
