SEC warns Nigerians against investing in Loom Ponzi Scheme

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The Securities and Exchange Commission (SEC) has warned Nigerians against investing their money in Loom Money Nigeria, a Ponzi scheme that has been making waves in the country.



BlackBox Nigeria recalls that two years after the popular Mavrodi Mundial Moneybox (MMM) Ponzi scheme crashed with billions of naira lost, Nigerians are starting to flood towards Loom, another scheme that promises astonishing returns on investment.


Scam Alert! Like MMM, Nigerians Are Getting Hooked To Loom Ponzi Scheme

MMM penetrated the Nigerian market in 2015 with over 2 million people signing up for the scheme by the time it crashed in December 2016.



Despite the loss of billions to that scheme and many of its ilk, Loom Money Nigeria is starting to gain widespread following among Nigeria’s online community.



However, while speaking during a press conference in Abuja on Thursday, May 16, 2019, the Acting Executive Commissioner (Operations) of the SEC, Isyaku Tilde, warned the Nigerian public against investing in the scheme which is not registered with the commission and has no established structures.



He said,


“We are aware of the activities of an online investment scheme tagged ‘Loom Money Nigeria’. The platform has embarked on an aggressive online media campaign on Facebook and WhatsApp to lure the investing public to participate by joining various Loom WhatsApp groups to invest N1000 and N13,000 and get as much as 8 times the value of the investment in 48 hours.


“Unlike MMM that had a website and the promoter known, the people promoting Loom are not yet known and this pyramid scheme operates through closed groups mainly on Facebook and WhatsApp.


“If it were a local Ponzi scheme with known offices, it would be very easy for the Commission to seal their offices and freeze their accounts.


“We therefore wish to notify the investing public that the operation of this investment scheme has no tangible business model hence it’s a Ponzi scheme, where returns are paid from other people’s invested sum. Also, its operation is not registered by the Commission.


“Please note that anyone that subscribes to this illegal activity does so at their own risk.”


The SEC disclosed that the Financial Services Regulation Coordinating Committee (FSRCC) is making efforts to shut down the scheme

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