Loom Money Nigeria is taking over social media by luring young people to participate in a pyramid scheme.
Represented at a press conference in Abuja on Thursday, acting Director-General of SEC, Ms Mary Uduk, gave the warning, saying that Ponzi scheme investors were at risk.
According to the SEC DG, the fraudsters carry out their illegitimate business activities via social media platforms like Facebook and WhatsApp, luring young Nigerians to invest as low as N1,000 and N13,000 and get as much as eight times the value of the investment in 48 hours.
She said, “We are aware of the activities of an online investment scheme tagged ‘Loom Money Nigeria’. The platform has embarked on an aggressive online media campaign on Facebook and WhatsApp to lure the investing public to participate by joining various Loom WhatsApp groups.
“Unlike MMM that had a website and the promoter known, the people promoting Loom are not yet known and this pyramid scheme operates through closed groups mainly on Facebook and WhatsApp. If it were a local Ponzi scheme with known offices, it would be very easy for the commission to seal their offices and freeze their accounts.
“We, therefore, wish to notify the investing public that the operation of this investment scheme has no tangible business model; hence, it’s a Ponzi scheme where returns are paid from other people’s invested sum. Also, its operation is not registered by the commission.”