Crowdyvest Dares SEC, Says Crowd-Funding Business Legal

Nigeria’s fintech driven cooperative society, Crowdyvest is insisting that its crowd funding product, Crowdyvest Halal Fund, is legal and duly registered under Lagos State laws.

The response on Tuesday follows a face-off with the Securities and Exchange Commision order to cease its new product, Crowdyvest Halal Fund.

Crowdyvest said, “In addition to the public statement we issued about the Cooperative’s registration with the Securities and Exchange Commission (“SEC”), we write to further state that we are in continuous correspondence with SEC and have provided all the necessary documentation to confirm the legality of the Society.

“We are a registered cooperative society under the Cooperatives Law of Lagos State and all our operations are in line with the tenets of cooperative societies as well as our by-laws. Attached is our Certificate of Registration for your reference.”

The fintech firm was launched in 2019 by Onyeka Akumah and four other Co-Founders. It was however unveiled fully as a crowd funding platform in January 2020

The Crowdyvest Halal Fund involves soliciting investments and deposits from investors.

On May 7, 2021, Crowdyvest launched a product for her members called the Halal Fund.

Crowdyvest said the product is purely targeted at the Cooperative society’s members for investment in a Rice sharing project and complies with the objectives of the Cooperative society.

But the SEC on May 31, which is 28 days from the launch said the activity of the fintech firm was illegal.

SEC said, “The attention of the Commission was drawn to the proposed launch of a Crowdyvest Halal Fund by Crowdyvest, an unregistered entity purporting to operate as a cooperative society.

“The Commission has since issued a Cease and Desist Order to Crowdyvest to stop the launch and operations of the Crowdyvest Halal Fund and any other investment activity which involves soliciting investments and deposits from the public.

In response, Crowdyvest said its Halal Fund was not regulated under SEC.

SEC recently launched a new rule on crowd funding which must go through a Crowdfunding Intermediary (CFI).

The regulator placed the limit the amount retail investors can plough in a crowd funding transaction to just 10 per cent of their net annual income in a year.

Crowdy however said in the fresh statement, “We assure you that all our Savings and Hyperfund products are in line with the Cooperative Bye-laws, they are safe and are being utilized as agreed.

“We are committed to improving the quality of life of all our members through our products and will continue to ensure we achieve this.”