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Zambian SEC Warns Investors About Scam Cryptocurrency Investments

Avatar Rick D. 3 months ago

The Securities and Exchange Commission of Zambia has issued a caution to the public to beware of scammers operating cryptocurrency investment advice services. The financial regulators received information about a company called KWAKOO that was pushing an initial coin offering with dubious future price predictions.

The nation’s SEC has stated that the firm is not registered with it and is therefore not qualified to give financial advice about securities. It reminds the public that only companies approved by the regulator may issue such investment advice.

Cryptocurrency Investment Advisers In Breach of Zambian Securities Act

The Zambian SEC has stated that KWAKOO’s promotion of the initial coin offering for the cryptocurrency Onxycoin was in violation of the Securities Act, No. 41 of 2016. According to a report in domestic news publication Lusaka Times, the company was advising clients to invest in various Onxycoin packages.

Those behind KWAKOO are believed to have told would-be investors to expect gains of 1,000 percent by June 2021. The head of the regulatory body, Philip Chitalu, told the publication that any person promoting or providing investment advice for assets deemed as securities must either be registered with the SEC or be exempt from the law as per the Securities Act.

Chitalu went on to state that the kind of presentations and advice provided by KWAKOO qualify as investment advice under the nation’s financial regulations. He added that since KWAKOO was not registered with the SEC, it fell foul of the Securities Act and was thus acting unlawfully in promoting the Onxycoin cryptocurrency.

Finally, Chitalu stated that SEC’s role was to protect investors from dubious claims such as those made by KWAKOO.

KWAKOO and Onxycoin themselves are closely tied. The CEO and founder, apparently Sir Anthony Saint according to Onxycoin’s Facebook page, posts many of the updates about the cryptocurrency on the social media site. However, that’s not all about Onxycoin that sounds more than a little dubious.

The project’s website is completely focused on how Onxycoin holders can make returns on their investments. There is little information about what makes the coin different from the thousands of other cryptocurrencies out there other than perks for investing early.

In terms of an overall project description the website’s landing page offers only:

“OnyxCoin is one of the most transformative technologies since the invention of the Internet. OnyxCoin stands firmly in support of financial freedom and the liberty that Bitcoin provides globally for anyone to voluntarily participate in a permissionless and decentralized network.”

The real red flag, however, is the referral bonus. An absolute hallmark of a classic ponzi scheme:

“OnyxCoin Affiliate program was structured provide value to all those who participate in our Public Sale. 35% of the money collected through our OnyxCoin Public Sale will be paid back to investors through our Referral and Binary Earnings. By leveraging your networks, you can get instant earnings with our platform.”

Related Reading: Is Largely Unbanked Africa Primed for Bitcoin Adoption?

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