Just weeks after the Securities and Exchange Commission (SEC) warned susceptible Nigerians to stay away from Loom Money Nigeria, the popular Ponzi scheme has suffered a significant setback.
The platform is no longer yielding returns to earlier investors.
Recall that during a press briefing in May, the acting Director-General of SEC, Ms. Mary Uduk, warned Nigerians that the activities of the money-making scheme were fraudulent.
Mary Uduk, Acting Director General of SEC (May 2019)
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…
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.
Loom Money became popular on social media in May this year, promising investors huge returns in no time at all. With as low as N1000, one could invest in the Loom scheme and get back N8000 within 48 hours.
However, recent tweets from investors who went to the alleged offices of Loom Money Nigeria in Lagos showed that they were no longer getting feedback as regards the expected returns from Loom.
The rate of ‘cashing out’ appears to have slowed down considerably until the scheme could no longer pay back both the invested capital and the expected return.
Nigerians have been reacting on Twitter with a few people empathising with investors. But by far the most vocal have been critics calling out the scammed.
As the above Twitter reactions suggest, Loom is not the first Ponzi scheme in recent times whose censoring by SEC has been largely ignored by Nigerians. Repeated warnings by SEC went unheeded right before the 2016 MMM crash that left many penniless and devastated. Hopefully, the loses are contained this time around.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!