Bitcoin was always on a back foot when it comes to the general perception of this digital currency network, but there seems to be a resurgence of this opinion in the recent months. As more and more companies begin to use the cryptocurrency, so does the focus once again move towards the question of its legality.
Now, there is also a resurgence of digital ventures that are in the best possible case shady and in the worse, complete pyramid schemes that are baseline illegal. For some of these, the idea of digital currency blended perfectly into their pitch and it looks like people are signing on board in spite of the lack of transparency or common financial sense.
More worryingly, the trend appears to be growing all over the world, regardless of the level of development in the afflicted nations. The recent news from Nigerian underlines this idea and here are the reasons why this is true.
The country’s top securities regulatory body, the Nigerian Securities and Exchange Commission or the SEC recently sharply criticized the local ads featuring OneCoin and other crypto or digital currencies. SEC warned the Nigerian population that they should exercise extreme caution when it comes to these investment offers. This move comes after OneCoin in particular attained heavy air time on local radio stations.
But, at the same time, aside from OneCoin, the local companies that are operating in this domain also promote investment opportunities in bitcoin as well. SEC published in their announcement that none of the companies, persons or business entities that are right now promoting cryptocurrencies in Nigeria have their official authorization for these procedures.
In fact, none of them have been even recognized by SEC as viable elements in the financial system. Because of this, SEC declared that none of them can officially either accept money from the public in the form of deposits or, on the other hand, invest money or offer any kind of financial service in the country or from it.
The SEC concluded that in some of these cases, the local advertisement might be promoting entirely fraudulent enterprises to the public. With this in mind, the citizens of Nigeria should be aware that the offers of these entities are most likely going to be very risky, carrying a high chance of money being lost.
Others could simply be pyramid schemes which are fully fraudulent under Nigerian law. However, it is unclear if the companies that are offering this will be prosecuted by the local law enforced and judicial systems.
It is not a coincidence that Nigerian authorities decided to this at this point in time. Starting in early 2017, a notorious system called MMM announced it would once again begin to operate in Nigeria, this time accepting payments in BTC. While many do use bitcoin in Nigeria for things like remittance, betting online and other purchases, the MMM offer connects BTC directly with an entity that has a really controversial track record.
This echoes the period back in 2015 when Nigeria was considering a move that would ban completely the use of all types of cryptocurrencies on its territory. While this has not materialized, the ire of the government body remains high.
Additionally, there are all the reasons why Nigerian government would act this way. As a nation of a huge difference in wealth among its population, along with incredible natural resources which exploitation is hampered by instability and corruption, the country does not need any additional problems.
The very fact that these companies promote and offer themselves on radio shows that they are targeting the classes of citizens who have limited financial means at their disposal. With this, the low ability to fight back in the legal domain is also a factor, so the Ponzi schemes can continue to work without any fear of present or future repercussions.
Bitcoin and its Place in the Mix
It seems that BTC will be dragged into the entire process of controversy, both in Nigeria and in other places where these schemes operate as collateral damage. As a digital currency, bitcoin operates on a fully transparent basis, with its most basic code being open source. It includes some elements that are not seen in traditional currencies, but it is still a completely unbiased system where no one is exploiting anyone else by design.
However, the Nigerian tale shows that in the regulatory circles, there is still little difference between one “something-coin” and the next. If Nigeria would, for the sake of argument, really decide to ban digital currency from its territory, the low and middle class would most likely suffer the biggest fallout of this decision.
There is a small chance of this really happening, but on the wave of the recent global discontent with traditional politics, it is not unimaginable to see some future leader in Nigeria that would promise the electorate that the dangers of digital currencies would be dealt with permanently. If that were to happen, aside from the direct impact on those who do use BTC, the country would also pass the opportunity for organic growth that comes from the presence of bitcoin development community, along with the wider blockchain development ecosystem.
Legality and Perception
Once again, the need for an official bitcoin PR body is clearly shown by this example. As long as one can talk for bitcoin, everyone else will take the opportunity to do so. The latest example shows how a simple association by concept can place BTC once again incorrectly, with Ponzi pyramid schemes.
Developing a truly encompasses PR mechanics would not be easy, having in mind the splintered nature of the development community. But, like eSports federations and other digital-only ventures that became organized for the benefit of everyone, bitcoin too should look in this direction.
Instead of leaving it to the ill-informed media, regulatory bodies and the public to make their verdict on bitcoin, a PR branch has to be there to provide the BTC perspective. Until this comes about, every problem like on in Nigeria currently will easily become entangled with bitcoin, in spite of the fact that it has nothing to do with it.