Why SEC, SiBAN warn against InksNation

For many people today, especially those who invested in Bitcoin (BTC) and Ethereum (ETH), the cryptocurrency sector is an innovative, interesting marketplace that can provide lucrative returns on the purchase of crypto, and serves as an alternative market to traditional financial products.

However, this innovative momentum faces a threat from an old vice — scams, as fraudsters are waiting in the wings to take advantage of every innovation.

The Security and Exchange Commission (SEC), the apex regulator of the Nigerian capital market, issued a warning to the public of illegal products of iBSmartify Nigeria, the promoters of a Blockchain known as iBledger (iBcashcryptocurrency) and InksNation.

According to the regulator, the activities of IBSmartify, the registered brand name behind the projects, which is promoting a blockchain known as iBledger (iBcashcryptocurrency) and InksNation are not registered or regulated by the commission.

The warning states: “The attention of the Commission has been drawn to the activities of iBSmartify Nigeria the promoters of a Blockchain known as iBledger (iBcashcryptocurrency) and InksNation.

“The general public is hereby advised that neither the promoters of iBSmartify Nigeria nor the illegal products they offer are registered or regulated by the Commission.

“In view of the above, 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 Nigeria.

This warning came just days after Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), the equivalent of Nigeria’s blockchain association, a self-regulatory body in the country, put out a public statement warning the public that InksNation’s is product ‘illegal.’

SIBAN is mandated with promoting cryptocurrency adoption as well as ensuring consumer protection against crypto scams. SIBAN believes that crypto scams, if left unchecked, will not only impede further growth of the space but may well reverse public confidence in the emerging technology.

SiBAN says it “saw this risk–very high risk–earlier and immediately alerted the members of the public. By paying older investors with newer investors’ funds without selling any product or service from which profit is redistributed, the InksNation’s scheme has an obvious Ponzi scheme feature.”

According Senator Iyere Ihenyen, to Secretary General, SiBAN, “as Nigeria’s self-regulatory blockchain association, SiBAN will continue to raise awareness and enlighten members of the community against illegal activities in the space. Hopefully, people will listen before it becomes too late.”

Explaining why Africa’s most populous nation has been grappling with scams for years, the General Secretary (GS) of SIBAN, said: “So to really understand the rising rate of scams in Nigeria, it is vital to understand the context. A country of over 200 million people with a high rate of youth unemployment and underemployment, Nigeria has unfortunately made itself a haven for scammers.”

Ihenyen said he first heard of Inksnation in December 2019, and dismissed claims by its founders that the investment scheme has its own blockchain.

The GS is emphatically labelled the platform a scam:

“Inksnation is not on any blockchain. Its Inksledger, which it claims to be its blockchain, is not public and may as well be inexistent. There is no whitepaper. In Inksnation’s team is the founder himself (as Daddy Ink) and ‘Elohim Jahgah God the Trinity Trustor & Grantor Inksnation.’

According to Ihenyen, Inksnation typifies scams that routinely take advantage of Nigeria’s economic situation to defraud thousands of unsuspecting investors.

The GS said efforts are ongoing to rid the space of scams. For instance, he says SIBAN and Nigeria’s Securities and Exchange Commission (SEC) have both issued public alerts warning the public about Inksnation.

He further stated that the alerts have not stopped Inksnation from continuing to invite more Nigerians to invest with it, noting two possible reasons why Inksnation is seemingly unfazed by the alerts and why Nigerians appear indifferent to the alerts.

Ihenyen suggests that Inksnation is aware that SIBAN can only issue advisories but lacks the power to enforce or to make arrests.

On the other hand, the SEC may be in a position to cause an action to be taken against Inksnation. However, by deliberately labeling itself as a blockchain entity, an unregulated space, it thinks the regulator lacks sufficient legal grounds to take action.

In addition, Ihenyen highlights the difficulty of convincing a greedy investor who has made up his mind to walk away. When SIBAN issued an alert against Inksnation, it received brickbats instead of plaudits, the GS says.

About the Author: Success Kafoi

Success Kafoi is a technology oriented Nigerian Journalist, with penchant in ICT development and technology innovation. You can reach him on success@naijaaffairs.com

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