Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) has cautioned against investing in the cryptocurrency known as Punisher Coin or $PUN.
In a statement yesterday, SEC said the promoters of the cryptocurrency are not registered to operate in any capacity within the Nigerian capital market.
The Commission added that the promoters were engaging in unauthorized presale and acting without regulatory approval.
SEC stated that it was disturbed several online publications blatantly advertising unauthorized presale of “Punisher Coin”, also known as “$PUN”, citing a newspaper’s report titled: “Cryptos to Buy: Why Punisher Coin Could Join Avalanche and Chainlink as a Top Investment Pick”
“The Commission hereby informs the public that neither “PUNISHER COIN” aka“$PUN” nor its promoters have been vetted nor registered by the Commission to either promote, launch, sale, trade or solicit investments from the Nigerian public,” SEC stated.
According to the Commission’s preliminary investigations, Punisher Coin falls under the category of “meme coins,” digital assets typically characterized by the absence of tangible utility or underlying projects.
“Further investigation has revealed that Punisher coin or $PUN is a Meme coin. Meme coins generally have no use case, intrinsic value or tangible projects backing them. Any attributed value to meme coin is usually linked to its promoters or the community effort which most often than not are susceptible to pump and dump schemes-a form of fraudulent activity that involves promoters spreading false or misleading information to create a buying frenzy that “pumps” up the price of a ‘coin’ and then “dumps” the coin by selling their own coins at the inflated price. Once the promoters dump their coins and stop hyping the coin, the coin price typically falls and investors lose money,” SEC noted.
The SEC highlighted that the value of such coins is often driven by hype and social media buzz, making them vulnerable to market manipulation through schemes commonly known as pump and dump.
SEC explained that these schemes involve promoters inflating the price of the coin through misleading claims, only to sell their holdings at the peak, leaving other investors exposed to significant losses when the hype fade dump.
“The public is therefore strongly warned to be wary about investing in the purported presale of punisher coin ($PUN) as any person who invest in such a scheme, does so at his or her own risk.
“The Commission similarly reminds investing public of the need to always Verify the authenticity of crypto and virtual or digital assets, the registration status of its promoters and trading platform via the Commission’s dedicated portal,” SEC stated.
Source; The Nation
