All those who are gripped in the wave of cryptocurrency with the growing acceptance of digital currencies must need to hold on to their excitement. Indeed this new digital monetary world is picking up its importance among big companies, but now comes a statement from EFCC from Nigeria. It has given strict caution to those who initiate crypto investments.
For those not aware of EFCC, its full form is the Economic and Financial Crimes Commission. Currently, it has warned about the possible risks regarding investing in cryptocurrency. It can land you in big problems since it is vulnerable to unlawful activities like cheating and is also uncontrolled. Let us know more about it in this article.
Increase In The Cases Of Scams
As far as the report mentions the spokesperson of EFCC, it has been found about maximum complaints regarding cheating in crypto investments by residents of Nigeria.
They smell a rat in the form of fraud being done to them.
The EFCC body spokesperson has also mentioned the increase of scams in cryptocurrency despite strict execution and interference of lawful bodies and even stakeholders.
And at the end, he warned the citizens of Nigeria to be extra careful whenever they take decisions of investment.
Prompting Nigerians To Stop Dealing In Cryptocurrencies
Following this warning, the EFCC body has even got the support of the apex bank of Nigeria and is prompting the citizens of Nigeria to stay away from indulging in cryptocurrency investment and trading too.
Earlier, the governor of CBN has also stated that no place of this new digital financial technology is not permitted in the monetary structure of Nigeria.
Hence, any kind of transaction in cryptocurrencies should be stopped and must not take place in Nigerian banks.
Nigerian Currency Becoming Useless Due To Bitcoin
Adding more fuel to the burning topic is Nigerian state members who too opposed the crypto utility in their country (Nigeria).
The worst came to the comment by a Senator, who held Bitcoin responsible for making their fiat currency worthless with no use and value.
No Affect On Cryptocurrency Usage
Amid all the strictness and opposition from Senator and EFCC, there is no such serious effect on the use of cryptocurrencies.
Still, it continues to sustain its existence in the country. As an example, in 2021, there is a rise in the volume of P2P BTC trading in Q1.
You will be surprised that it got increased despite the strict directives from CBN in February that ruled out clamping down traders who are dealing in cryptocurrencies from the financial body of Nigeria.
Now let us see how warnings regarding putting a stop to crypto investments and trading by EFCC of Nigeria will mold the opinion of cryptocurrencies from the public mindset.
What Are The Risks Involved In Crypto Investments?
After knowing about how the ERCC of Nigeria is cautioning people about cryptocurrency investments and even trading in them, let me help you in mentioning some of the high-risk factors that you need to know before taking any hasty steps in investing in crypto.
Let us see which are them.
Volatility & Manipulation In Prices
Price volatility is the major factor in terms of investing in cryptocurrency. One can expect any uncertain changes in the price of digital currencies. It is not all the boom you can expect in the rise of cryptocurrency.
There have been scams too. So there are mixed chances of getting gains or being at loss. Another adjoining factor that I want to mention is crypto whales. They too play a big role in price manipulation.
The main reason behind the stemming of volatility comes from this factor. The other two factors include speculation and sentiment. The strategies emanating from price manipulation result in pump and dump schemes, dark pool trading, etc.
Free From Regulations
Being free from regulations indicates the unpredictable nature of cryptocurrency. Also, the future restrictions of these digital currencies become the main concern for most investors and people in the business. Because of this factor, cryptocurrencies' value can be affected leading to a complete ban.
That is why before you come up with a decision on crypto investments, you need to understand the danger that lays behind it. Crypto regulations come in an unproportionate and complicated manner.
Tax treatment is also one such factor that bothers most investors. With no regulations applicable to cryptocurrencies, investors fall into the perplexing state when it comes to taking the step of investment.
It is all because they have no clarity regarding obligations of taxation.
Risk Of Theft
Keeping the crypto-assets can also come up with fatal risks. Why I am saying this is because many have suffered losses when their wallets became vulnerable to hacking theft resulting in the stealing of crypto assets.
But you must also know the fact that unless there is no proper way of storing your cryptocurrencies, then they will continue to remain unprotected with the cases of hacking threats.
Ending note
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