Market News

BY  Temitayo Jaiyeola 

Nigerians are no strangers to Ponzi schemes, with CBEX joining a long list of successful scams. According to investors, the people behind the digital platform have carted away over N1.3 trillion from their wallets after crashing on Monday.

The platform now joins the scams hall of fame in the country. This list includes Mavrodial Mondial Movement (MMM) of 2016 – 2017, which affected over three million Nigerians; Twinkas, Ultimate Cycler, Zar Fund, Givers Forum, iCharity, Get Help Worldwide, and more.

CBEX launched in Nigeria in July 2024, promising investors a 100 percent return in 30 days. Users were encouraged to refer others, with bonuses and tiered rewards based on the size of their referral network.

Concerns started surfacing online on Wednesday, April 9, when a prominent X user, Man of Letters, @Letter_to_Jack, wrote about an individual who reportedly invested $1,000 and withdrew $5,000.

“Having done all my checks, the platform flies all the flags of a Ponzi scheme,” he tweeted.

By Friday, April 11, panic had set in as some users reported being unable to withdraw their funds.

“They told us it was just a rumour,” an investor told BusinessDay, referring to conversations in one of CBEX’s WhatsApp groups. “They assured us withdrawals would resume by Tuesday (April 15).”

BusinessDay reviewed messages from a group named CBEX_ST, where one member wrote on Monday, “The ST team has always been committed to doing what we say we will do, and we have always promised to compensate anyone who loses money as a result of trading errors on our signals.”

By Monday, the platform had crashed. “I lost over N3 million,” Femi Azeez, an investor, said. CBEX has locked its Telegram channels and restricted WhatsApp groups. It has also introduced a verification fee where users are asked to pay $100 or $200 to supposedly unlock $1,000 or $2,000, respectively.

Social media has since exploded with complaints and videos showing angry investors storming CBEX offices in Ibadan and Lagos, and users generally lamenting their losses.

During an X space organised by Trending X, Taiwo Owolabi, a cryptocurrency expert and security analyst, revealed that stolen funds had been traced to a TRX address (yourself:TDqSquXBgUCLYvYC4XZgrprLK589dkhSCf). He noted that the total amount lost in USDT stood at $847 million and could rise further.

Owolabi emphasised that the invested funds are gone as CBEX is not licensed. He highlighted that the creators designed a weak website to look like ByBit, a legitimate trading platform.

“They designed the weak website to convince people in the future that it was a security breach that affected them. Apparently, when you make payments, you pay them into a TRX account, and then, immediately, they move it from that TRX wallet, gather it, convert it to USDT, and then to ETH. So, when you are logging into your account, there is literally no money on your profile,” he said.

According to the Securities and Exchange Commission (SEC), CBEX was unregistered and operated illegally. Speaking at a virtual engagement with fintech stakeholders on the Investment and Securities Act (ISA 2025) on Monday, Emomotimi Agama, the SEC’s director general, had cautioned:

“Very recently, there has been a post that has gone viral around a particular platform and the activities of such platforms. And of course, the aftermath of it is further news of their closure and all of that. In fact, I was tagged in one of those messages. I want to state it very clearly, if it is not registered, it is illegal.”

Under the newly revised ISA 2025, operators of Ponzi schemes now face a 10-year jail term and a N40 million fine, if convicted.

CBEX’s downfall adds to Nigeria’s growing list of financial scams. In 2022, the Nigeria Deposit Insurance Corporation (NDIC) disclosed that Nigerians lost N911.45 billion to Ponzi and related fraudulent activities in the last 23 years. The corporation noted that MMM alone accounted for N18 billion of that figure.