Nigerian Securities and Exchange Commission warns of pyramid schemes such as OneCoin, Bitcoin is innocently caught in the crossfire

This past week, the Nigerian Securities and Exchange Commission (SEC) warned its citizens about virtual currency investments. While warning about two known multi-level marketing (MLM) coins, the agency also threw mud at Bitcoin investments.

Nigerian SEC Confuses Bitcoin and MLMs

On January 12, the Nigerian Securities and Exchange Commission issued a statement reminding its citizens to be cautious when investing in digital tokens such as Bitcoin, Onecoin and Swisscoin. The SEC warned that the public should be aware that these investments are "risky" in nature and some of them are "fraudulent pyramid schemes."

The agency said in its announcement:

“Local citizens are advised to be wary of digital currency investment vehicles.”

The notorious Ponzi scheme MMM (Nigerian version) has recently become increasingly popular in the country, with this multi-level marketing and pyramid scheme attracting the attention of the country's financial institutions. Law enforcement agencies around the world are currently investigating this type of scam.

Sadly, authorities have lumped Bitcoin in with two major pyramid schemes: OneCoin and Swisscoin. Bitcoin is not a pyramid scheme, and supporters do not need to recruit people to receive rewards. Unlike OneCoin and Swisscoin, Bitcoin is a truly peer-to-peer decentralized network that was researched by academic leaders.

OneCoin Scam

It is reported that both OneCoin and Swisscoin pyramid schemes use multi-level pyramid schemes to attract new members and promise high returns. Babbitt has previously exposed the OneCoin pyramid scheme scam, and its so-called tokens are most likely not cryptocurrencies. For example, cryptocurrency market value websites such as Coinmarketcap.com or Coincap.io do not include this pyramid scheme coin.

Law enforcement agencies in many countries around the world have also issued warnings about OneCoin. Many Bitcoin supporters firmly believe that Bitcoin has nothing to do with this pyramid scheme. In fact, some well-known Bitcoin users have publicly stated that OneCoin is a scam. In addition, Bitcoin enthusiasts recently revealed the problem of OneCoin's difficulty in cashing out at a OneCoin gathering in Florida.

Swisscoin scam

Swisscoin is also a "cryptocurrency" that uses multi-level marketing methods. Swisscoin advocates swear that their digital token will one day surpass Bitcoin, which is very similar to OneCoin's claim of being a "Bitcoin killer." According to foreign media investigations:

“Unfortunately, Swisscoin is yet another MLM company trying to capitalize on the appeal of cryptocurrencies, but has nothing to do with digital currencies. Essentially, members are investing in a fake coin with no ecosystem and, worse still, a value that is arbitrarily set by the company. Swisscoin is not traded on any digital currency exchange and cannot be used for purchases on non-Swisscoin websites.”

Bitcoin should not be associated with these MLM coins

Bitcoin is a cryptocurrency that is not controlled by anyone. Many supporters will not tell you that you must invest in this digital asset. In most cases, they will tell you the risks and remind you to invest within the risk tolerance range. The Bitcoin community has never shied away from the high volatility and high risk of Bitcoin. Bitcoin is an experiment. Unlike pyramid schemes such as OneCoin and Swisscoin, there is no central organization behind the Bitcoin network.

MLM coins like OneCoin and Swisscoin are basically new parasites that try to exploit the properties of Bitcoin for propaganda purposes, but have nothing to do with the cryptocurrency protocol in essence. Unfortunately, law enforcement agencies and financial institutions in some countries cannot distinguish the difference between the two.