Pictorial representation of Ponzi Scheme
Grief, shock and regret have overwhelmed thousands of Nigerians after CBEX, a once-celebrated digital asset platform, vanished into thin air, taking with it an estimated N1.4 trillion in life savings, pensions and borrowed ‘hope’.
Already, the collapse has passed as the biggest Ponzi scam so far recorded in the country. Added to an estimated N300 billion lost previously, Nigerians may have had hard-earned N1.7 trillion swept away by Ponzi schemes in nine years – since 2016. This does not include the estimated losses to cryptocurrency trading and the recent IAS crash.
CBEX, a digital asset trading platform that lured thousands with guarantees of high returns, reportedly froze on Monday, leaving thousands of subscribers scampering.
Nothing is certain about the exact number of Nigerians on the network or the total value of funds trapped. But reports put the loss at about N1.4 trillion, a figure The Guardian could not independently verify as of press time.
A cryptocurrency expert, Taiwo Owolabi, had in a report claimed that approximately $847 million USDT was diverted from CBEX to private wallets. At the prevailing exchange rate of N1650 per USDT, the value comes to N1.4 trillion.
Owolabi noted that CBEX, operated by moving investors’ funds through various digital assets and wallets, thereby making it difficult to trace the exact value.
According to data from the Securities and Exchange Commission (SEC), Nigerians had lost an estimated N300 billion to Ponzi schemes between 2016 and 2023. In the past two years, IAS and many other schemes had collapsed with billions of naira belonging to struggling Nigerians trapped.
The younger generation, who subscribed to the schemes, equally lost billions of naira to various Crypto projects that collapsed or had their value reduced to almost nothing.
The collapse of CBEX may have triggered torrents of emotional, financial and medical crises nationwide. From Lagos to Port Harcourt, Abuja to Ibadan, victims have shared harrowing tales of lost life savings, dashed hopes and emotional trauma.
In Ibadan alone, over 27 individuals have reportedly been hospitalised, prompting calls for state intervention and subsidised medical care. If the government heeds the calls, it will be subsidising the cost of greed and extreme risk-taking by young Nigerians, who, out of desperation to survive against odds, are throwing everything into unconventional money-doubling schemes.
The government, perhaps, would also be investing resources it failed to utilise to build infrastructure that would improve on local capacity utilisation, including jobs.
The Guardian learnt that the scale of the fraud may warrant an international investigation, given that some of the platform’s activities involved cryptocurrency transactions and cross-border fund flows.
Nigerian investors and civil society organisations are currently calling on the government to establish a recovery task force and a compensation framework, similar to efforts seen in other countries following large-scale investment scams.
CBEX now joins a growing list of digital Ponzi-style operations that have fleeced Nigerians in recent years. From MMM to Racksterli, Chinmark Group to Loom and IAS, each has followed a similar script – big promises, rapid expansion and sudden collapse when the activity peaks – leaving behind financial ruin and broken trust.
Despite repeated warnings from the SEC, desperate investors continued to pour money into CBEX. However, recent developments signal that regulators are preparing for stronger action against such fraudulent platforms.
In March, President Bola Tinubu signed into law the amended Investment and Securities Act (ISA) 2025, a sweeping reform aimed at strengthening investor protection and tightening oversight of Nigeria’s capital market. One of its most significant provisions directly addresses the menace of Ponzi schemes.
The amended law explicitly criminalises the operation and promotion of Ponzi schemes, empowering the SEC to prosecute offenders with penalties of up to 10 years in prison.
This is a landmark shift from previous regulatory approaches, which lacked the legal muscle to enforce serious consequences for fraudulent investment operators.
However, while the newly amended Investment and Securities Act 2025 is seen as a significant step forward, some investors believe legislation alone will not be enough to stop the wave of financial scams plaguing the country.
For many, the deeper issue lies in the widespread lack of investor education. An independent investor, Amaechi Egbo, said that beyond greed, ignorance is fueling the crisis. According to him, many Nigerians can’t differentiate between genuine investments and fraudulent schemes—they simply see glowing testimonials online and jump in, unaware of the risks.
Egbo argued that unless the government takes the lead in launching aggressive, nationwide investor education campaigns, these schemes will continue to thrive, especially in an economy battered by inflation, unemployment, and poverty. He noted that poor financial literacy, desperation and the seductive promise of fast wealth have left many citizens exposed and easily manipulated.
“This is not just about one platform disappearing, it reflects a deeper crisis, a lack of investor education, poor regulation of digital assets, and a growing desperation among the public.
“This trend will likely continue unless massive education campaigns are launched. People need to understand how these scams work, not just be told to avoid them.”
President of the Independent Shareholders Association of Nigeria, Moses Igbrude, called for a multi-pronged strategy to effectively tackle the growing menace of Ponzi schemes and digital investment frauds. He stated that curbing Ponzi schemes requires more than just regulatory pronouncements. According to him, it demands a sustained national commitment to financial education, deliberate effort to reduce poverty, and a show of firm resolve by the SEC to prosecute offenders.
“We must consistently educate the masses to abandon the get-rich-quick mentality. Without economic empowerment and real consequences for fraudsters, these schemes will keep flourishing,” he said.
President of the New Dimension Shareholders Association of Nigeria, Patrick Ajudua, pointed to the amended Investment and Securities Act (ISA) 2025 as a turning point. He noted that the law explicitly prohibits the operation and patronage of unregistered investment companies.
However, he acknowledged a gap: the SEC can only regulate companies that voluntarily register with it, leaving a grey area where unregistered platforms continue to operate unchecked.
“Anyone who patronises unregistered investment companies does so at their own risk,” Ajudua said. However, he maintained that the SEC must arrest and shut down such illegal outfits while intensifying awareness campaigns to protect unsuspecting investors from fraudulent schemes.
President of the Ibadan Zone Shareholders Association of Nigeria, Eric Akinduro, echoed the concerns and stressed the need for enhanced regulatory oversight. While he acknowledged the efforts of regulators, he argued that more must be done to monitor and control the activities of these fraudulent platforms before they spiral out of control.
“Some of these platforms claim to be registered, but what regulatory checks are actually in place?” he queried. He criticised the limited scope of current awareness efforts, which are often buried on agency websites, and advocated for the use of social media to broaden outreach and financial literacy.
“Nigerians don’t seem to learn from past experiences. We keep falling for the same tricks because we’re drawn to easy money, and it always backfires. He argued that while stronger laws like ISA 2025 are crucial, enforcement, education, and proactive communication must go hand-in-hand if Nigeria is to win the fight against digital financial scams.
The CBEX platform, which operated without registration or regulatory oversight, abruptly shut down on Monday, leaving thousands of investors stranded and in disbelief.
CBEX had promised mouth-watering returns, 100 per cent profit on investments within 30 days, an offer many found too tempting to ignore in a country where inflation, job losses, and economic hardship have forced many to seek alternative income streams.
For weeks, CBEX appeared to be a financial miracle. It attracted a mix of everyday Nigerians, professionals, traders, and even retirees, who bought into its promise of quick and guaranteed profits.
From WhatsApp groups to Instagram pages and online forums, glowing testimonials and screenshots of alleged earnings fueled a digital frenzy. Referrals became the norm. The more people you brought in, the higher your returns.
But by Monday morning, the dream turned into a nightmare. The platform went offline without warning. The website became inaccessible. Its mobile app crashed. Customer support lines stopped working. Even its vibrant social media pages, once flooded with posts and engagements, fell eerily silent. Overnight, CBEX disappeared—along with billions of naira in investor funds.
“I was convinced it was real because of how many people were posting about it,” said a small business owner in Port Harcourt who invested N2 million into the scheme. “I never imagined I could be scammed this way. Now, I can’t sleep,” a subscriber said.
Similar stories abound. Victims from Lagos, Abuja, Enugu, and other parts of the country have flooded online platforms with laments, some sharing screenshots of wiped-out balances and others demanding accountability. The emotional toll is heavy. Some investors reportedly emptied their life savings. Others borrowed heavily, hoping to make a quick profit. (The Guardian)
