By Dipo Olowookere
Promoters of Ponzi schemes and unregistered investment schemes in Nigeria may soon be in big trouble if the law being proposed by the National Assembly is passed into law and signed by the President.
On Thursday, a bill to amend the Investment and Securities Act 2007, sponsored by Mr Babangida Ibrahim, representing MalumFashi/Kafur Federal Constituency in Katsina State at the House of Representatives, scaled the second reading.
The amendment is titled A Bill for an Act to Repeal the Investments and Securities Act, 2007 and Enact the Investments and Securities Bill to Establish Securities and Exchange Commission as the Apex Regulatory Authority for the Nigerian Capital Market as well as Regulation of the Market to ensure Capital Formation, the Protection of the Market to ensure Capital Formation, the Protection of Investors, Maintain Fair, Efficient and Transparent Market and Reduction of Systematic Risk; and for Related Matters.
The bill intends to combat the menace of Ponzi schemes and ensure that the Securities and Exchange Commission (SEC) is well equipped to stem the tide.
According to Mr Ibrahim, there has been a lot of complaints by Nigerians on the activities of these schemes that promise unreasonably high returns and at the end of the day, they fleece Nigerians of their hard-earned money hence the need for more regulations to monitor them.
Under the proposed law, ‘A bill to repeal the Investment and Securities Act 2007 and to enact the Investments and Securities Act, 2021’ which passed the second reading at the floor of the House of Representatives yesterday, SEC will be empowered to address the challenges of Ponzi schemes.
Section 195 (1) of the Bill empowers SEC thus: “The Commission shall have the power to enter and seal up all prohibited schemes and shall obtain an Order of court to freeze and forfeit all assets of such schemes to the Federal Government of Nigeria.
“(2) The cost and expenses incurred under subsection (1) above shall be a first charge from the funds and properties of the illegal scheme including assets of its owners, promoters and or managers, whether acquired legitimately or otherwise.
“(3) For the purposes of this Bill, “prohibited scheme” including those commonly known as a Ponzi or Pyramid scheme means: (a) Any investment scheme that pays existing contributors with funds collected from new contributors to the scheme promising high returns with little or no risk: i) Whether or not the scheme limits the number of persons who may participate therein, either expressly or by the application of conditions affecting the eligibility of a person to enter into, or receive compensation under the scheme; or ii) Whether the scheme is operated at a physical address or through the internet or other electronic means. (b) Any scheme where participants attempt to make money by recruiting new participants usually where: (i) the promoter promises a high return in a short period of time, and (ii) no genuine product or service is actually sold; or (iii) the primary emphasis is on recruiting new participants
“(4) The promoter(s) and operator(s) of any entity engaged in a prohibited scheme commits an offence and is liable upon conviction to imprisonment for a term of ten (10) years or a fine of N5,000,000 or both”.
According to Mr Ibrahim, “The current ISA 2007 is old and we all know a lot has happened between that time and now like technological advancements. The capital market has to be dynamic in today’s world in a bid to contribute its quota to national development and that is one of the reasons why we are pushing this.”
“A lot of things have happened between that time and now hence the need for an amendment. When that law came into existence we did not have derivatives and commodities markets as we do now, these are some of the issues that are necessitating this amendment.
“The plan is to make this Bill a little bit flexible so some national government can be able to approach the capital market to source for fund either for developmental projects,” he added.
Another part of the amendment is to increase the period within which a claim for compensation could be made for the Investor Protection Fund to six years from the date of occurrence of the defalcation, revocation, cancellation, insolvency or bankruptcy of the dealing firm. The period in the current Act is six months.
The objectives of an Investor Protection Fund is to compensate investors who suffer pecuniary loss arising from the insolvency, bankruptcy or negligence of a dealing member firm of a securities exchange; defalcation committed by a dealing member firm or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, or received or deemed received by the dealing member firm in the course of its business as a capital market operator; and revocation or cancellation of the registration of a dealing member firm.
According to the proposed amendment, two new subsections have been introduced to complement the existing provisions on the manner in which a claim to the investor protection fund can be made.
This is a departure from Section 213 (2) of the 2007 Act, which requires a claim for compensation to be made in the first instance to the securities exchange.
In addition, subsection (4) of the Act has been modified to take care of such preconditions for compensation as may have been prescribed by the Board of Trustees.
Specifically, it added that a verified claim must be paid by the investor protection fund to an investor within 14 days of such verification by the securities exchange.
It said, “A claim for compensation under this part of the Bill shall be made in writing to the board of trustees within 6 years from the date of occurrence of the defalcation, revocation or cancellation of the registration of the dealing member firm and insolvency or bankruptcy of the dealing member firm, and any claim which is not so made shall be barred unless the Commission otherwise determines.
“No action for damages shall lie against a securities exchange or against any member or employee of a securities exchange or of a board of trustees or management sub-committee by reason of any notice published in good faith and without malice for the purposes of this section.”
Mr Ibrahim expressed the optimism that when the Bill is passed into law, it would empower the SEC with the necessary backing to effectively regulate the capital market and emphasize the independence of the agency in line with the requirements of the International Organization of Securities Commissions (IOSCO).
Wework Co-Founder Adam Neumann’s Crypto Project Secures $70M, Funding Round Led by A16z
The co-founder of the company Wework, Adam Neumann, is behind a new crypto project called Flowcarbon and on Tuesday, the blockchain project revealed it raised $70 million from a handful of investors and was led by Andreessen Horowitz (A16z). Flowcarbon’s chief executive Dana Gibber says the project’s efforts provide a “brilliant financial mechanism that creates a counterbalancing incentive to reforest, revitalize and protect nature.”
A project backed by Adam Neumann, the co-founder and former Wework executive raised $70 million from strategic investors, according to an announcement published on Tuesday. Neumann is a controversial character for his role in the company in 2019 when it was discovered the firm could not turn a profit. In September 2019, Wework filed an S-1 filing for an initial public offering (IPO) stock launch and Neumann resigned from his CEO position. Flowcarbon is a project Neumann co-founded with his spouse Rebekah, Dana Gibber, Ilan Stern, and Carolina Klatt.
Flowcarbon is all about fixing the global climate crisis and calls itself a “pioneering climate technology company working to build market infrastructure in the voluntary carbon market (VCM).” It aims to tokenize the carbon credit industry and the company raised $70 million in venture capital and from the private sale of its carbon-backed token. The company announcement notes that Flowcarbon’s financing was led by Andreessen Horowitz’s subsidiary A16z crypto unit.
The funding round also saw participation from Invesco Private Capital, General Catalyst, Samsung Next, Sam and Ashley Levinson, RSE Ventures, Kevin Turen, and Allegory Labs. The token sale saw investments from Box Group, Celo Foundation, and Fifth Wall. The company implements carbon credits into the Celo blockchain and converts them to tokens called goddess nature token (GNT). The goal is to make the carbon credit voluntary but also “more transparent, liquid and accessible,” according to the website’s summary.
On Tuesday, Flowcarbon’s announcement notes:
The CEO of Flowcarbon, Dana Gibber, explained there are “powerful economic incentives to destroy and degrade critical natural landscapes around the world.” However, a VCM like Flowcarbon’s could counterbalance those incentives, according to Gibber. In addition to Flowcarbon’s financing announcement, Andreessen Horowitz’s (A16z) Arianna Simpson published a blog post about A16z investing in Flowcarbon. Simpson said that the Flowcarbon project unlocks “a new economic flywheel for sustainability.” The general partner at Andreessen Horowitz who invests in crypto further remarked:
Flowcarbon’s funding round, led by A16z and the handful of other investors, racked up a total of $32 million. The remainder of the $70 million raised stemmed from the goddess nature token (GNT) sale. Flowcarbon’s website says GNT is 1:1 backed as “each GNT token is backed by 1 carbon credit from a carbon removal or reduction project.” Every carbon credit retains “real-world value” and the company claims they are “certified by the leading carbon credit issuers.”
What do you think about Adam Neumann’s Flowcarbon raising $70 million? Let us know what you think about this subject in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Cornucopias: A Revolutionary Cardano Blockchain Project That Is Redefining the Gaming Metaverse Industry
PRESS RELEASE. The metaverse is a virtual world that allows millions of players to live beyond their immediate environment. With blockchain technology, users can create, own and utilize digital assets while interacting with other people in the virtual space.
Cornucopias ‘The Island’ is a play-to-earn, build-to-earn, learn-to-earn, host-to-earn MMORPG game powered by the blockchain. In a world of unique domes, players can own land and other NFT-based assets which can be traded with other users on Cornucopias’ marketplace and many secondary market places. Cornucopias is a fun, safe and expanding metaverse with one of the most positive and engaged communities of any blockchain-based project.
With the excitement of metaverse innovation sweeping the globe, there is an extremely high demand for the first Cornucopias land sale, which is expected to sell out in record time. Cornucopias NFT projects have a track record of completing successful sales with the right balance of supply and demand. For example, Cornucopias NFT2tree philanthropic NFTs sold out in under 20 seconds and planted close to 50,000 trees in Senegal, Africa, and that number increases daily in perpetuity. Bubblejett NFTs sold out with Mythic rarity hitting over 100x value on secondary markets. In addition, the GTI Javelin NFT sold out despite experiencing a system pause, and the community benefited when the Cornucopias team decided to gift the GTI Javelin NFTs for free to thank their extremely positive community for their patience.
Dominating the Blockchain Gaming Industry
The main objective of Cornucopias is to lead the metaverse industry through its highly innovative ecosystem. Furthermore, the Cardano blockchain supports the game with a thriving community passionate about physical and digital projects. Therefore, Cornucopias is gaining the attention of metaverse enthusiasts, gamers and the mainstream audience around the world, with new members joining the community at a highly accelerated rate.
Cornucopias ‘The Island’ is more than just a blockchain-based game because participants can do more. In traditional gaming, players repeatedly pay through micro-transactions, subscription fees, DLC packages, and other money-grabbing mechanisms that generate over $300 billion in annual revenue for traditional game developers. As large traditional game developers struggle to crack the code on the blockchain-based games that are the future of the industry, Cornucopias is perfectly positioned to claim a large portion of the gaming industry pie.
The new gaming model is with NFT assets, it provides the exact opposite user experience. Instead of repeatedly making in-game purchases to ‘unlock’ game content, players only need one purchase to own an NFT for life, or sell it on the secondary market. The benefits of this ownership for players include a plethora of perks, rewards, and privileges. As a result, owning a Cornucopias NFT allows players to possess an ‘unprecedented utility’ that unlocks various features and in-game advantages, with the future of using those same owned assets in other games and on other blockchains.
Participants are freed from paying monthly membership fees because the Cornucopias game is free-to-play, which gives everyone on the planet the ability to take advantage of the opportunity to join the metaverse, and play the games it contains and much more. Players can sell their NFTs, trade them with someone else, or stake them for additional rewards.
In addition, ‘The Island’ combines gaming with real-world commerce and gives opportunities for
traditional and e-commerce companies to own land in the metaverse, sell and promote their real-world brands, goods and services to a hard-to-reach global audience that they have potentially never had access to before.
The project is easily accessible worldwide and is built on the latest Unreal Engine 5 games engine. This software makes the game compatible with PCs, mobile phones, game consoles and smart TVs. As a result of Cornucopias’ bold strategy to become the first AAA UE5 blockchain based game, Cornucopias is ahead of the competition and already has the attention of global brands, the growing crypto community, game developers, 3D artists, and the game enthusiasts that will power and run the governance of the self sustaining ecosystem.
More development for the future
The NFT2Tree mints are a test program for Cornucopias internal NFT sale, mint and marketplace system, which will be used in the upcoming land sale, and an opportunity to provide real-world eco and sustainability value, with all monies from the sale going to plant trees in Senegal, Africa. As a project that wants to impact both the digital and physical world, Cornucopias intends to kick off many other philanthropic NFTs.
Furthermore, 100% of the secondary market sales commission will be used to plant real trees into perpetuity, with the hope of automatically sustaining an increasing positive impact.
Cornucopias is also launching the first of many mobile mini-games in Q3 2022, the PC game in Q4 2022 and consoles in 2024 to maintain its highly aggressive road map.
Cornucopias ‘The Island’ is a massive play-to-earn, build-to-earn, host-to-earn, and learn-to-earn blockchain-based game where players can be rewarded with and/or own land, properties and other NFT-based assets with real-world value, all by playing games in a fun and safe metaverse.
To learn more about Cornucopias ‘The Island’, click on the links below.