In its mission to eradicate Ponzi schemes, the Securities and Exchange Commission (SEC) has cautioned Nigerians against carrying out investment activities on Tofro.com, tagging the online platform as a potentially fraudulent crypto trading operation. The commission said Tofro does not have regulatory approval to operate in the Nigerian capital market and lacks the license and legal backing to require investment from the public.
According to a public notice issued by the SEC on Thursday, the commission warned Nigerians to avoid the platform, describing its activities as suspicious and indicative of a Ponzi scheme.
“The commission hereby informs the public that Tofro is not registered by the commission either to solicit investments from the public or operate in any other capacity within the Nigerian capital market,” the notice read.
The commission explained that Tofro’s mode of operation is Ponzi scheme-related, which includes characteristics such as promising unusually high returns, relying heavily on a referral system for payouts, and failing to honour withdrawal requests, which are common red flags associated with Ponzi schemes. It stressed that anyone investing in Tofro does so at their own risk.
“Investigations have revealed that Tofro’s operations exhibit the typical indicators of a fraudulent Ponzi scheme, including the promise of unusually high returns, heavy reliance on a referral system to sustain pay-outs and failure to honour withdrawal requests from subscribers,” it added.
SEC’s Director-General, Emomotimi Agama, reiterated that investors should always verify the registration status of any platform via its official website before investing. He urged Nigerians to exercise caution when approached with high-return investment offers, especially from unlicensed platforms, and that it is crucial to understand the dangers of putting hard-earned money into ventures not registered or regulated by the SEC.
He also warned Nigerians that registration with the Corporate Affairs Commission and the Special Control Unit Against Money Laundering under the Economic and Financial Crimes Commission does not confer legitimacy on any investment scheme operating in the country.
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