This past week the Securities and Exchange Commission (SEC) of Nigeria has warned its residents about virtual currency investments. The agency’s warning has bundled bitcoin investment with two Multi-Level-Marketing (MLM) operations well known for deceptive activities.
The Securities and Exchange Commission of Nigeria Conflates Bitcoin Investment with MLM Schemes
On January 12, the Nigeria’s SEC issued a statement cautioning citizens from investing in digital tokens such as Bitcoin, Onecoin, and Swisscoin. SEC details the public should be aware that these investments are “risky by nature” and some of them are “fraudulent pyramid schemes.” The Nigerian authorities state in the public notice:
The public is hereby advised to exercise extreme caution with regard to digital (cryptocurrencies) as a vehicle of investments.
The news comes after the well known Ponzi MMM Nigeria has become increasingly popular in the country. MLM and pyramid-like schemes have been catching the eyes of the country’s financial authorities as law enforcement agencies worldwide begin to investigate these operations.
Sadly the authorities have placed bitcoin alongside two shady businesses, Onecoin and Swisscoin, which both practice MLM techniques. Bitcoin is not a pyramid scheme, Ponzi, and proponents are not recruiting people for rewards. Unlike Swisscoin and Onecoin the cryptocurrency is studied by academic leaders, used by citizens voluntarily, and is a real peer-to-peer decentralized network.
Both of these organizations use MLM methods of recruiting and promised returns after investing. Bitcoin.com has done extensive reporting on Onecoin as a known scam and most likely the token isn’t even a cryptocurrency at all. The token doesn’t seem to have a legitimate blockchain, and the so-called digital currency is not listed on market capitalization browsers like Coinmarketcap.com or Coincap.io.
Onecoin is also being investigated by law enforcement in many countries worldwide. Many bitcoin proponents have firmly established that bitcoin has nothing to do with this MLM operation. In fact, some well-known bitcoiners have publicly stated that Onecoin is a scam and should be recognized as such. Furthermore, the hosts from Bitcoin Uncensored recently crashed a Onecoin meeting in Florida revealing it is not so easy to cash out Onecoins. In fact, it may not be even possible at all.
— Roger Ver (@rogerkver) October 2, 2016
Swisscoin is so-called ‘cryptocurrency’ that utilizes MLM recruiting as well. Swisscoin affiliates swear their digital token will one day outperform bitcoin much like Onecoin’s claim to be the “bitcoin killer.” On various social media outlets, you can see Swisscoin members spamming threads with “opportunities” to invest. The operation deploys services called “training packs” which consist of investment packages such as a trainee, a trader, or crypto-director. One publication details their opinion of Swisscoin’s MLM schemes stating:
Unfortunately, Swisscoin is another case of an MLM company attempting to capitalize on the allure of cryptocurrency, though the company actually has nothing to do with digital currency at all. Essentially, affiliates are investing in a fake currency that does not exist outside of the Swisscoin ecosystem, and worse, the value of this fake currency is an arbitrary number set by the company. Swisscoins are not traded on any crypto exchanges, and cannot be used to purchase anything outside of the Swisscoin website.
Bitcoin Should Not Be Associated With These MLM Operations
Bitcoin is a legitimate cryptocurrency, and many proponents will never tell you that you must invest in the digital asset. A vast majority will tell you if you are looking to invest in bitcoin only put in what you can afford to lose. The bitcoin community has no problem explaining that the nascent cryptocurrency can be volatile and risky. Bitcoin is an experiment and, unlike Onecoin and Swisscoin, there is no central organization behind the network.
Onecoin and Swisscoin are basically a new breed of parasites trying to use the the great attributes of bitcoin as their cover. They are polar opposites of true cryptocurrency protocols and should not be associated with bitcoin. However, these “fake crypto” MLM operations continue to pretend to be cryptocurrencies. Unfortunately, some law enforcement authorities and a few country’s financial agencies have blended these two pyramid schemes with a legitimate cryptocurrency.
What do you think about the Nigerian SEC associating bitcoin with these two MLM operations? Let us know in the comments below.
Images courtesy of Shutterstock, and Pixabay.
Can you remember your first-ever bitcoin purchase? For hundreds of us it was some kind of bitcoin-related swag to show the world we supported the digital economy. Try spending your first bitcoins at our bitcoin.com Store – there’s bitcoin clothing, accessories, art, even bitcoin wallet hardware and research reports. Start your journey down the rabbit warren now.
Use Bitcoin and Bitcoin Cash to play online casino games here.