Be wary of celebrity crypto endorsements, experts warn Nigerians

The recent collapse of $Jota Coin has cast doubt on the legitimacy of cryptocurrency projects in Nigeria, with experts warning of an increase in scams and false promises of quick riches.

The $Jota Coin, launched by popular skitmaker Chukwuebuka Amuzie, also known as Brain Jotter, reportedly failed. Experts stated that there are indications of the coin crashing just hours after its September 1 debut on the TON network.

Meanwhile, cryptocurrency expert Rume Ophi has cautioned Nigerians to be wary of celebrity endorsements, citing the risk of unsuspecting investors being misled into investing in a fraudulent scheme.

According to Ophi, the $Jota Coin debacle, in which project initiators withdrew liquidity within 30 minutes of launch, serves as a reminder of the risks associated with the cryptocurrency space.

“The cryptocurrency space has enormous potential, but it also carries significant risks if you’re not careful. What we’re seeing in the market is extremely concerning,” Ophi said.

“The coin’s value has dropped significantly from its initial hard cap of over a hundred thousand. But more alarmingly, our evidence shows that the contact address of the project initiators withdrew liquidity within 30 minutes of launch. The SEC had to step in and warn Nigerians to stay away from such tokens. Once again, we’re seeing history repeat itself.”

The Securities and Exchange Commission (SEC) had recently warned Nigerians to stay away from such tokens. Earlier this year, the agency called on potential investors to avoid $Davido’s coin linked to Nigerian popular singer David Adeleke, popularly called Davido.

The SEC said investing in $Davido’s coin was risky because meme coins lack fundamental value and are purely speculative. A statement by SEC management on Friday, June 14, said it does not recognize the coin.

“Generally, meme coins are cryptocurrencies inspired by memes and internet jokes. They are often envisaged as fun, light-hearted cryptocurrencies promoted through a social media community and sometimes through celebrity endorsements,” SEC said.

Ophi also drew parallels to recent events in the United States, where celebrities faced court fines for promoting cryptocurrency projects without proper disclosure.

“The Kardashians got themselves involved in similar situations and paid huge fines in the millions. Nigerian celebrities need to be very careful about what they endorse in this space.”