The Security and Exchange Commission (SEC) has warned investors away from dealing with iBSmartify Nigeria cryptocurrency offerings in an effort to clamp down on crypto-related scams and unregulated products.
For many -- especially early investors in Bitcoin (BTC) and Ethereum (ETH) -- the cryptocurrency sector is an innovative, interesting marketplace that can provide lucrative returns on the purchase of crypto, acting as an alternative market to traditional financial products.
However, with every innovation, fraudsters are waiting in the wings to take advantage. As interest in cryptocurrencies climbed, the unregulated space became a Wild West of exit scams, failed cryptocurrencies, and Initial Coin Offerings (ICOs) that provided little or no protection for traders exchanging their hard-won fiat currency for speculative investment in virtual coins.
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Over the past few years, regulators worldwide have attempted to control the industry by enforcing rules that turn cryptocurrencies into assets and ICOs as investment events, but exit scams, theft, and insider fraud are still rampant.
In this case, the commission has been made aware of recent activities by iBSmartify Nigeria, the entity responsible for the promotion of crypto based on the iBledger (iBcashcryptocurrency) and InksNation blockchains.
Inksnation offers the Pinkoin cryptocurrency and claims the InksLedger blockchain can "end poverty in any country in less than 9 months incentivizing goodness, promoting love, unity, oneness, peace and equitable distribution of wealth."
According to SEC, the organization itself, as well as the products on offer are not registered or regulated by the commission and are therefore deemed illegal.
"The general public is hereby warned that any person dealing with the said entity and others in the same business in any manner whatsoever, does so at his/her own risk," SEC said in a public notice.
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SEC added that companies permitted to conduct investment activities in Nigeria can be checked via the commission's website.
While this may be only one illegal offering of many worldwide, it is important to note that warnings of this nature are important in the battle against cryptocurrency-related fraud and loss.
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According to CipherTrace (.PDF), in comparison to 2018, cryptocurrency investor losses caused by fraud, Ponzi schemes, and misappropriation rose by 533% in only 12 months, reaching $4.5 billion last year.
Inksnation has not responded to requests for comment at the time of publication.
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