The Securities and Exchange Commission has cautioned the investing public to be careful when making investment decisions.
The SEC has received information and enquiries from the public regarding a company called KWAKOO that is requesting the public to invest in a cryptocurrency called ONYXCOIN, its Chief Executive Officer Philip Chitalu has said.
Mr. Chitalu said KWAKOO is promoting and advising individuals to invest money by purchasing various Onyxcoin packages.
He said SEC further understands that the promoters are predicting the value of Onyxcoin to increase by more than 100 times or 1,000 percent by June 2021.
Mr. Chitalu clarified that it is a requirement of the Securities Act, No. 41 of 2016 (“the Securities Act”) that any person engaging or holding out as engaging in the provisions of advice on investments in securities, including advice on subscribing for, Of purchasing, selling, exchanging or holding of, securities to any person in Zambia must be licensed, unless otherwise properly exempted by Law.
He said presentations which promote and solicit for funds to be invested in a financial product such as Onyxcoin qualify as investrnent advice in the context of the Securities Act’s definition of an investment adviser.
Mr. Chitalu warned that KWAKOO and its promoters and/or representatives are NOT licensed or authorized by the SEC to provide investrnent advice or solicit funds from the Zambian investing public for investment in any flnancial product in Zambia or elsewhere.
He added that the SEC’s regulatory role of licensing Of authorization of capital market intermediaries, including Dealers and Investrnent Advisers, ensures the protection of investors through the SEC’s supervision of the marketing and/or dealings by the intertnediaries.
Mr. Chitalu said Initial Coin Offerings typically involve the creation of digital tokens using distributed ledger technology and they are sold to investors by auction or through subscription, in return for a crypto-currency such as Bitcoin or others, including Onyxcoin.
He said these offerings are not standardized, and their legal and regulatory status is likely to depend on the circumstances of the individual ICO further warning that there are clear risks associated with these offerings.