Chaka Technologies Assures Investors of Funds Security following SEC IST's Restraint

Sunday, December 20, 2020 / 06.57AM / By Proshare Tech/ Header Image Credit: Ecographics/Chaka/SEC

In a swift response to theSaturdayafternoon public notice /release by the Securitiesand Exchange Commission (SEC) indicating that the Investment and SecuritiesTribunal (IST) had granted an interim order to restrict Chaka from advertisingand offering for sale, shares, stock or other securities of NSE-listedcompanies; the company through Tosin Osibodu, the Co-founder& CEO, Chaka Technologies issued an email titled "RegulatoryUpdate" to customers/investors using itsplatform to appraise them of the situation and the security oftheir funds.

Recall that SEC informed the market that the Investments and SecuritiesTribunal (IST) on Thursday 17th December 2020, made interim Orders restrainingChaka Technologies Limited, and its promoters from advertising or offering forsale shares, stock or other securities of companies or other entities on allChaka platforms, pursuant to an application by the SEC had filed, informing theTribunal that the Defendants (Chaka) were engaged in investmentactivities, including providing a platform for the purchase of shares inforeign companies such as Google, Amazon and Alibaba.

This development has already awoken the market and fintech ecosystem as to itsimplications for understanding how well regulators seek to build a bridgebetween tech adoption and regulations; especially given the good intentionscovered in the SEC facilitated #fintech Roadmap Committee of The NigerianCapital Market report of August 30, 2019 titled The Future of Fintech inNigeria.

Itappears from Chaka's mail to customers: it is seeking an engagement that wouldoffer clarity on how and what trading platforms and Apps can work with andwithin the Nigerian investment space. This, analysts spoken to consider isabout time. Indeed, we recall that some of these issues were underscored inProshare's September 02, 2020 online trading report titled Online Trading Ranking Report 2020 - Trading in aPeriod of a Virus; Building Good Habits.

In the mail to customers, Chaka Technologies Limited explained theirunderstanding of developments, viz:

"We only learned about SEC's position today and whilewe await receiving the formal order from SEC, please note that your investmentswere placed by a duly licensed entity and remain safe through Citi Investments(using the Chaka platform), and will continue to be custodied by aSEC-regulated broker.

Since we began our journey in 2019, we have beentransparent about our regulatory status, leveraging strategic partnerships withregistered brokers in the U.S and in Nigeria, specifically Citi Investment CapitalLtd, which is regulated by the SEC. Our commitment to investor education,trust, and transparency remain a top priority.

We would like to state that Citi Investment Capital isfully compliant with the commission's regulations as all local equities areoffered through a locally licensed brokerage firm, registered with the NigerianStock Exchange (NSE), Central Securities Clearing System (CSCS), and regulatedby Nigeria's Securities and Exchanges Commission (SEC).

Following the SEC statement, our legal and operationsteams are working to accelerate a resolution. Further updates will be providedby Monday."

The statement, in appreciation of the need to manage customer concernsindicated that the firm has activated its support team where customers canreach out to them. The support team can be reached on Telegram, via email [email protected]or via calls to their customer care hotline: +234 701 1204 586.

NB: Chaka's regulatory status can be found at chaka.ng/disclosures.