The Nigerian Web 3 space is rife with crypto trading groups promising prospective clients massive returns on investments by joining them.
The opinions of Nigerians who have joined this Crypto trading group and experts in the industry call for caution in engaging such groups so as not to fall victim to scams.
James Aniogba an experienced Crypto and Forex trader shared his experience with bad actors in the Nigerian crypto trading space who exploit Nigerians hoping to get rich quickly from crypto trading with such schemes.
James explained that some of the coins promoted in Nigerian crypto trading groups by their owners are scam coins and the promoters of the coins don’t even invest in them and are often the brains behind the coins.
“A lot of persons do this ..some might even go ahead and create some coin in which they lure their group members to invest, but at the end of the day they run into a loss
“We have some people who don’t even invest in the coin they bring out, their aim is just to lure them and go away with their money
“Because people love seeing the flashy lives some make money outside crypto and parade themselves as crypto influencer. So they begin to promote different coins that they don’t even know anything about, they create groups, and at the end of the day the coin dumps so the crypto influencer have nothing to lose” James said
James added that many unsuspecting Nigerians have lost thousands of dollars to such schemes and often get blocked after the heist.
They keep doing it on and on ..keep creating coins then dump the coins after the victim has invested
So many persons have invested thousands of dollars and at the end of the day got nothing” James added
Web 3 experts weigh In
Crypto and Web 3 policy experts added their voices to the conversation stressing the spike in crypto trading groups in the Nigerian Web 3 space.
According to them, these groups promise members lucrative returns on investment by following their trading signals and implementing their trading strategies after paying a membership fee.
Nairametrics investigation uncovered that most of these crypto trading groups charge as high as N100,000 to N150,000 as membership fees for prospective clients who are looking to join them.
They often make use of social media platforms like X, Instagram, and WhatsApp to market their groups drawing in new clients who are mostly newbies in the crypto trading scene with no actual trading experience.
Nairametrics engaged Crypto and Web 3 policy experts to get their views on this practice and to determine whether indeed these trading groups deliver on their promise or whether they are well-organized scams preying on the get-rich-quick mentality of the average newbie in crypto trading.
Not for starters
Rume Ophi a leading Web 3 market analyst in Africa weighed in on the topic from his personal experience with such crypto trading groups.
He opined that such groups are usually not for starters and prospective members still need to do their research and have a sound grasp of the markets.
“Crypto signal group is not for beginners because as a beginner if you join a signal group there is no way you will not fail. You need to know a lot of things and then compare knowledge with the signals you are receiving, to sum up your trading strategy” Rume said
Rume added that such Crypto trading groups don’t stand the test of time because the motives of the founders are usually predatory.
He stated that more than often the people behind such platforms intend to use the clients for liquidity to bate foreign crypto entities coming into the country using their local community as a marketing asset.
Finally, he argued that some of these groups indeed make money for their members but such income is usually not valued because the clients played no real part in the creative process of the trades. They simply copied Trading signals and replicated the trades.
An outright scam
Some experts were rather extreme in their views on Nigerian crypto trading groups calling them outright scams and feeding off a facade.
Olayimika Oyebanji a Web 3 policy analyst and award-winning crypto journalist had a rather negative view of these crypto trading groups calling for stronger regulatory measures targeted at cracking down on such schemes.
He believes the crypto trading groups feed off a get-rich-quick myth which is a far cry from what is obtainable in reality.
“They are well-disguised scams thriving on the age-long myth which says that trading is an easy path to wealth. It’s all smokescreen. This myth is perpetuated within the crypto community by the get-rich-quick syndrome and the stories of overnight millionaires sold to the public by these charlatans. But when you go deeper, you are going to discover a system that is rigged to favour only the few who have certain advantages over the majority.”
Mr. Oyebanji further explained that the deliverables promised by the founders of such Crypto trading groups are almost impossible and are predatory at best.
“Trading is a matter of self-discipline and motivation. The notion that anyone can consistently predict price movements and make you rich is a fallacy. I hope to see tighter regulations catching up with such predatory behaviour.”
Nairametrics reached out to three founders of popular Nigerian trading groups to get their input but received no reply from all three.
According to CoinGlass Data, In the last 24 hours, 31,458 crypto traders were liquidated, the total liquidations come in at $58.36 million. Long traders lost 17.54 million while short traders lost a whopping $40.94 million.