The CBEX SCAM

We have as a people experience what we would call historic bitterness with Ponzi schemes. “Once bitten, twice shy,” they say. But at this point, we at SEB think it should rather be a situation of “forever shy”.

Recall the following:

MMM (Mavrodi Mundial Moneybox): Originating in Russia, it collapsed in the 1990s and resurfaced in various countries, including Nigeria, before crashing again.

Bernie Madoff's Scheme: One of the largest in history, it defrauded investors of billions before unraveling in 2008.

Bitclub Network: A cryptocurrency-based Ponzi scheme that operated globally before its collapse.

Spitzedersche Privatbank: A 19th-century scheme in Germany, promising high returns but ending in fraud.

Well , we came by this article captioned "CBEX scam: Folly of Greed", courtesy, Punch Newspapers, and we thought it wise to bring you up to speed with its submissions to perhaps, disabuse the minds of many about the Ponzi scheme menace in our society.

ONCE again, another cycle of financial anguish has been repeated in Nigeria. The collapse of the so-called Crypto Bridge Exchange has left over 600,000 Nigerians devastated, with N1.3 trillion disappearing overnight. The masterminds of the latest Ponzi scheme-gone-bust have vanished into thin air, just like the promises they made, leaving tears, sorrow, and regret in their wake.

Despite huge losses from previous scams, Nigerians continue to fall into the same trap, driven by desperation and unchecked greed.

CBEX, operated in Nigeria by ST Technologies International Limited, appeared legitimate on paper. It was registered with the Corporate Affairs Commission and even listed with the EFCC’s Special Control Unit Against Money Laundering. That is where the credibility ended.

CBEX operated without a licence from the Securities and Exchange Commission, despite aggressively soliciting public funds and promising outrageous returns of 100 per cent in 30 days.

Even after Hong Kong’s financial authorities issued a public warning against CBEX in April 2024 for false licensing claims and unauthorised transactions, Nigerian regulators failed to act until it was too late.

The CBEX fiasco is not an isolated event. It is just the latest in a long list of elaborate Ponzi schemes and scams set up to fleece the gullible and the greedy.

In the 1980s, Umanah Umanah pioneered Nigeria’s Ponzi era. MMM, with Russian origins, scammed three million Nigerians and crashed in 2016, erasing over N18 billion in people’s funds. In 2022, MBA Forex made off with more than N213 billion, using the façade of forex investment. Since 2016, at least 50 Ponzi schemes have stolen untold sums from Nigerians.

They used buzzwords—crypto, forex trading, and AI-—which most Nigerians barely understand, to lure victims.

The Nigeria Deposit Insurance Corporation estimates that over N2 trillion has been stolen from Nigerians by such dubious entities over the past decade.

While poverty, unemployment, and a struggling economy make Nigerians vulnerable, it is greed, not ignorance, that drives this epidemic. Most victims are fully aware that there is a risk of loss, but think they are smart enough to quickly cash out before doomsday.

Funds reserved for property purchases, wedding arrangements, tuition expenses, loans…even money pilfered from employers and relatives have been drained by Ponzi scheme operators due to Nigerians’ penchant for quick profits. This same mentality has mainstreamed sports betting, now a booming industry with in-country revenues set to hit $590 billion this year, per Statista.

Nigerians must realise that there is no such thing as quick, risk-free wealth. An offer of consistently high returns with no transparency or regulation is not an opportunity; it is a trap.

Will Nigerians ever see the folly of greed?

Besides the scam artists, there are other enablers. CBEX, like many scams before it, thrived with the help of influencers, celebrities, pastors, and social media figures who lent credibility and trust to a lie for a fee.

Such promoters must be held accountable. Influencers who push Ponzi schemes must face legal, financial, and social consequences. There should be no excuses for fronting for schemes with the potential to ruin lives and livelihoods.

Regulators need to be alive to their duties. The passage of the Investments and Securities Act, 2025, is a positive step. It gives the SEC authority to regulate digital asset platforms and imposes steep penalties on Ponzi scheme operators.

However, laws only matter when enforced proactively, not after the money is gone. CBEX was missing from the blacklist issued by the EFCC days before it crashed. Regulators must monitor platforms in real-time, respond swiftly to red flags, and collaborate with global partners when warning signs emerge.

More importantly, massive public enlightenment campaigns are needed to stem this growing societal problem.

Nigerians must return to the traditional values of hard work as a foundation of enduring wealth.  Citizens should be wary of pipe dreams sold as instant prosperity.