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Opinion: How Nigerians are losing millions of dollars through cryptocurrency investments

by Philip Obin

 

Why I don’t do money doubling business and only invest and work hard to earn money!

Any internet investment scheme promising you more than 24% Return On Investment (ROI) annually is never registered and must not be taken seriously, especially when they are trading with Bitcoins or any other cryptocurrency.

*Don’t allow excitement, greed and quest for quick money to blindfold you*

Ask yourself the following questions:

  1. Are they registered and regulated by any investment or financial authority? If yes, in which country(ies) are they permitted to operate?
  2. What do they invest your money in?
  3. How do they make the money they share with you?
  4. How much do they earn to be able to pay you this high daily, weekly or monthly?
  5. Do they have a physical office or virtual address?
  6. Do they have real and registered phone numbers?
  7. Who are their directors and major stakeholders?
  8. What’s their history in the financial industry?
  9. Go to www.who.is/whos/theirwebsite.com to see when their domain name was registered and when it will expire.
  10. If their domain name was registered some months or years not up to 5yrs or at least 3yrs, they are most likely scammers.
  11. Is their domain registration having Domain Privacy Registration? If yes, they are scammers.
  12. Is their business covered by any insurance to protect your investment with them?

 

Most of these investment schemes are owned and operated by Nigerian Yahoo! Boys who have diversified their business from the regular email scams.

They use cryptocurrency because no cryptocurrency is fully not regulated by any authority for now (not even Bitcoin), so they could get away with your money easily.

Investing in cryptocurrencies involves very high risk, as prices have been extremely volatile.

Many experts are sceptical about bitcoin as an investment primarily because there is nothing for them to analyse.

Vivek Belgavi, Partner and Fintech Leader, PwC says, “There isn’t enough of an ecosystem surrounding bitcoins to allow fundamental analysts to study it as an investment…”

Bitcoin is neither commodity nor currency. The lack of clarity about its origin is another big issue related to bitcoin. In olden days, highly priced metals like gold, silver, etc. were used as currencies. Then came currencies printed by governments (or central banks) and these are called ‘fiat currencies’. Though its proponents claim that cryptocurrency is ‘mined’ using complex mathematical formulae, they are reluctant to call it a commodity. They also claim that it is not controlled by any government and so, it is ‘democratic’.

Therefore, cryptocurrencies don’t fall into the ‘currency’ category either. “It can be very risky for businesses, industry and people to trade or invest in bitcoins as it is just a formula, not backed by any tangible asset, but by sheer demand,” says S.P. Sharma, Chief Economist, PHD Chamber of Commerce and Industry.

Don’t invest if you don’t understand.

Some global bankers and experts have warned investors against investing in cryptocurrencies because they are of the opinion that it is nothing but a bubble that is just about ready to burst.

Jamie Dimon, CEO, JP Morgan, for instance, has recently expressed his doubts about the value of bitcoins, saying “It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed.”

Unlike other investment avenues, cryptocurrencies are not regulated by government entities or banks. “There is no authority like Sebi that you can approach for grievance redressal,” says Vikram Pandya, Director, Fintech, S.P. Jain School of Global Management. Sharma concurs, “If we buy something with a credit card and get ripped off, we can call the bank and ask to be compensated.

 

What is cryptocurrency?

A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency.[1][2] Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.

Bitcoin, being the most popular of them, was created in 2009, and the first decentralized cryptocurrency. Since then, numerous cryptocurrencies have been created

If you get ripped off in a cryptocurrency transaction, or if your bitcoin wallet is hacked and your money is stolen, it is impossible to get the money back, and there’s virtually no one or authorities to report to, even if you report to security agencies, it’s always almost impossible to track down cryptocriminals.

This is because opening a cryptocurrency account or wallet doesn’t require KYC, so anyone can open an account with just an email address and any name and the account is ready for use within seconds, and you can have as many accounts as possible, use them for any business and abandon them anytime.

As I write this, a lot of illicit financial flows are happening between Nigeria and Hong Kong, China, others, and I urge the federal government of Nigeria through the CBN to look into it befeore it gets out of hand.

What these guys are doing is simply what I call ‘digging a hole to fill a hole and robbing Peter to pay Paul kind of business model.

Initially, some will earn and get paid, but ultimately it will crash and people will lose money.

Even before it they crash, they usually allow those with little investments to keep earning and withdrawing their profits and even capital, just to make them believe and have the confidence to invest more.

Then once you are convinced, generally, you want to invest more to earn even more. For example, if you invest N100,000, you get as much as N150,000 in profits alone @ 5% daily interest; and if you compound your daily interest in reinvesting daily, you could earn as much as N500,000 in 30 days (including your initial capital).

So naturally, you want to invest big to make it big too, but once you invest big money and you are not in a hurry to withdraw, they will allow your account to keep generating interests but would have provisioned not to be able to perform withdrawals.

Then when you write them, it takes forever for them to reply so you’ll continue to write and complain until they disable your account or shut down their website, if they have made enough money already.

The usually create another new website and platform with a different name, phone numbers and sometimes modify their investment plans.

Some of them go as far as registering their Business Name with business registration authorities, which is easy to do online these days, just to make investors believe they are real.

They also hire people online to do a video showing their office with their signpost on the wall and staff working. They make it so real that you’ll hardly know they are scammers.

That was how I got trapped and lost N500,000 to one of them and learnt the hard way. I later followed up on them and realised they are Nigerian Yahoo! Boys who have formed a formidable syndicate and are highly connected with a strong financial base.

Further investigations revealed that Nigerians lose millions of dollars weekly to these investment schemes, even as most of them are shy to share their experiences.

So if you can hear the voice of God, I would encourage you to run away from them and run as fast as you can, especially if the word *Integrity* means anything to you because the day it will collapse, all those you’ve introduced or referred to the business will hardly trust you again.

Avoid Ponzi and pyramid schemes with little or tangible products or services to sell.

Learn to work hard and earn your money and avoid get rich quick programs, like MMM and Bitcoin mining investment. There’s actually no such ‘Bitcoin mining’.

If you must do network marketing business which can sure give you big money and helps you attain financial freedom, you have to be ready to work hard and willing to invest adequate time and resources, as multi-level marketing business, especially, is designed to favour only 3-5% of the entire members of the network, and this they will never tell you, but if you work hard enough to fall within that tin line of 5%, you’ll never know poverty again in your life, especially if you work with a strong team, established, tested and trusted MLM companies with tangible products and services, such as GNLD, Forever, or Club080.com which is registered 100% Nigerian with physical address, phone numbers, with Nollywood credible Actor Zack Orji as brand Ambassador.

Good advice is like a mini skirt. It may be short but covers the vital part of your body.


Op–ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija

Philip Obin is a certified Mobile Money Agent, Media, eBusiness and financial consultant,

CEO @ Potech Ltd

President @ Club080.com

Founder @ Wazobialand.com

Business & Media Consultant

APC Chairmanship Candidate,

Biase LGA, Cross River State,

 

Read » Opinion: How Nigerians are losing millions of dollars through cryptocurrency investments on YNaija

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This post was syndicated from YNaija. Click here to read the full text on the original website.

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