Chaka, Bamboo, Risevest banned by SEC after CBN clampdown on cryptocurrency startups
- Securities and Exchange Commission in Nigeria have banned Chaka, Bamboo and other Fintech investment startups from operating
- SEC said they are operating unregistered stocks and warned Nigerians to desist from conducting business with any such platforms
- Prior to the ban, the capital market had shut down Chaka from operating. It has now expanded the clampdown
PAY ATTENTION: Join a community of CEOs, founders and decision-makers: subscribe for a free monthly business newsletter Digital Talks and succeed BIG!
Nigerians have been warned against trading with investment platforms, Chaka, Bamboo and other Fintech startups two months after the Central Bank of Nigeria banned cryptocurrency exchanges.
The investment platforms are the sources for foreign stocks like Amazon, Facebook, Tesla, and other global tech listed firms for many Nigerians looking to spread their investment beyond the local capital market.
These gateway platforms have now been labelled unsafe by the investment regulator in Nigeria, instructing individuals conducting businesses with them to desist as they are not recognised by SEC.
Chaka, Bamboo, Risevest and other rivals have been banned from operating within the country through sales or issuing of foreign stocks whose entities are not registered within the country.
Prior to the recent ban, SEC had been clamping down on these online investments and trading platforms, stating that they are operating outside the regulatory laws and unregistered. This led to Chaka being taken offline.
In February, the CBN had banned cryptocurrency trading, another online investment. The financial regulator ordered banks to close accounts linking to crypto transactions.
Source: Getty Images
In a circular released on Thursday, April 8, 2021, to warn the capital market and investors, the regulator faulted the claims of the startups that they have a partnership with Capital Market operators (CMOs) which have been registered with the market authority.
Addressing the illegality of the investment platforms, SEC said in line with its rules and regulations, only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public.
"Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.
"The Commission enjoins the investing public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums."
Meanwhile, Legit.ng had earlier reported that the UK court has banned the founder of Arise Networks Limited, Nduka Ogbaobona, from acting as a director for the next seven years due to debt which his company is struggling with.
The media giant, under which This Day newspaper and Arise TV are housed, is indebted to about £25 million. The debt started increasing in 2013, and it became worse in 2014.
This was due to the Nigerian government's decision to tighten outflows of capital out of the country. The policy affected their dependent financial sources which are from Nigeria at the time.
Source: Legit.ng
