Nigeria cracks down on meme coins

The Nigerian Securities Regulatory Authority has issued warnings against Zugacoin and Samzuga GPT, labeling them as fraudulent crypto operations.

Memokines tied to pump and dump schemes

The Nigerian Securities and Exchange Commission (SEC) has labeled Zugacoin and Samzuga GPT as fraudulent cryptographic operations and issued a public warning. The committee stated that the promoters and issuers of these digital assets are not registered to operate within the Nigerian capital markets and that the assets are not approved for public issuance.

In an alert shared via X, Nigerian regulators said a preliminary investigation revealed that both Zugacoin and Samzuga GPT were classified as “Meme Coins.” The committee emphasized that meme coins usually lack authentic use cases, intrinsic values, or concrete projects that support them.

“The value attributable to a memecoin is usually linked to the efforts of its promoter or the community that is mostly susceptible to pumps and dump schemes,” says the Nigerian SEC.

Under these so-called pump and dump schemes, the promoter of Memocoin or tokens spreads false or misleading information and artificially inflates prices. They then sold their own holdings at inflated values, and unsuspecting investors were not wise. This practice inevitably leads to significant losses for investors when promoters stop “hype” activities.

The SEC alert came weeks after issuing an illegal operator warning against the Crypto Bridge Exchange (CBEX), which reportedly resumed operations across Nigeria. Reports suggest that CBEX had requested $200 for investors with a balance of over $1,000, and $100 for investors with a balance of less than $1,000 before withdrawing.

However, regulators have made it clear that enforcement measures have already been launched against CBEX and its promoters following previous fraudulent investment activities. It added that it is working with relevant law enforcement agencies to properly investigate CBEX/ST Technologies International Ltd. and will take appropriate measures in line with the provisions of the Investment and Securities Act of 2025.

Meanwhile, the committee reminded the investment public of the importance of verifying the reliability of providing encryption, virtual assets, or digital assets. It urged investors to check the status of the promoters and trading platform registrations through the committee’s dedicated portal.