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SEC threatens unregistered crowdfunding platforms with N1m fine

The Securities and Exchange Commission, SEC, has said operators of unregistered crowdfunding platforms would be fined N1 million and N10,000 for every day the violation continues.

The commission in a statement, yesterday, warned investors on the activities of unregistered investments crowdfunding platforms.

Crowdfunding is the process of raising funds to finance a project or business from the public through an online platform.

Crowdfunding portal is a website, portal, intermediary portal, application, or other similar module that facilitates interaction between fundraisers and the investing public.

SEC said that it has “Observed with concern the fraudulent activities of some unregistered investment crowdfunding platforms and hereby, strongly advises the investing public against making investment(s) with or through any crowdfunding platform not registered with the commission.”

It stated that in “Recognition of the potentials and importance of crowdfunding platforms and the need to protect investors through effective regulation, had in January 2021 published its crowdfunding rules and requested well-intending crowdfunding platforms to register with the Commission and comply with the Rules by June 30, 2021.

“The general public and operators of unregistered crowdfunding platforms, should know that operating any crowdfunding platform that is not registered by the commission is illegal and may lead to prosecution of such operators and loss of investment by their clients.”

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