April 27, (THEWILL) – The collapse of CBEX is the latest example of financial fraud in Nigeria that has left thousands of individuals with significant losses. The scheme promised quick, substantial returns on cash investments and attracted large numbers before abruptly shutting down. The sudden disappearance of the operators and the avalanche of unpaid claims has again spotlighted the dangers of unregulated investment platforms and the persistent failure of Nigeria’s financial regulators, particularly the Securities and Exchange Commission (SEC), to act swiftly.
Ponzi schemes are not new to Nigeria. Though their presentation may change, the structure remains the same: funds from new investors are used to pay earlier ones, without any legitimate underlying investment. The cycle collapses when new investors dry up. Despite this well-known pattern, Nigerians continue to fall for such schemes.
CBEX followed this model. Promising returns of a staggering 100 percent, it appealed to many struggling under economic hardship. With unemployment high, inflation surging and the naira weakening, the lure of quick financial relief was strong, even if the risk was evident.
A significant factor driving the success of such schemes is poor financial literacy. Many Nigerians lack a basic understanding of investment principles, making them vulnerable to fraud. The rise of social media has only made things worse. Influencers and online marketers, some incentivised by the schemes themselves, promote these platforms through testimonials and “proofs” of payment, often without due diligence.
The SEC is mandated to protect the public by licensing investment operators, monitoring their activities and warning the public about illegal outfits. In CBEX’s case, the SEC later confirmed that neither CBEX nor its known affiliates, such as ST Technologies International Ltd and Smart Treasure/Super Technology were registered to operate as a Digital Assets Exchange or solicit investments.
Preliminary SEC findings revealed that CBEX promoted itself as a legitimate platform, using flashy marketing to lure investors with promises of guaranteed, unrealistic returns. The SEC has since cited Section 196 of the Investments and Securities Act 2025, pledging to collaborate with law enforcement agencies to take enforcement action. It urged the public to avoid platforms promising implausible profits and to verify the registration status of any investment company on its online portal.
Yet, the core issue remains: why did the SEC not intervene earlier? In my view, the leadership of the SEC is incompetent, weak and incapable of protecting the public from these illegal investment schemes.
CBEX is only the latest in a string of such schemes. Previous examples, MMM, MBA Forex, Chinmark, Baraza, also involved significant public losses. Victims of these schemes often reported concerns early, but scarcely received any effective support. In many instances, these operators ran visible public campaigns, staged large events, and advertised widely, yet regulators failed to act. The signs were not hidden.
On a more hopeful note, the Economic and Financial Crimes Commission (EFCC) has made public commitments to hold CBEX operators accountable. Spokesperson Dele Oyewale stated that the EFCC had been tracking the platform even before the public backlash and had issued warnings about suspected Ponzi schemes. In March 2025, the agency listed 58 such companies to caution the public, although CBEX was not one of them.
The CBEX crisis came to a head when users were unable to withdraw their funds. Outrage erupted on social media, culminating in angry investors looting the office of Smart Treasure in Ibadan. The EFCC has assured that recovery efforts are underway and it is working with Interpol and international partners to locate and prosecute the operators and recover
“invested” funds.
The damage caused by these schemes extends beyond financial loss. They erode trust in legitimate financial institutions. When victims are abandoned by regulators and the justice system, even genuine investment advice becomes suspect. This weakens the financial ecosystem and discourages long-term saving and investing.
There is also a cultural angle. In Nigeria, quick success is often admired. The pressure to appear successful among peers, particularly on social media, drives many to take reckless risks. When others appear to be benefiting, the fear of missing out overrides rational caution.
Despite official promises to improve financial education and regulation, the results have been minimal. Public campaigns are rare, schools do not teach financial basics and when regulators do speak, their warnings are buried in technical jargon. Coordination between agencies such as the SEC, CBN, EFCC and the Police is limited, reducing overall effectiveness.
Even when perpetrators are caught, justice is rarely swift. Many disappear without trace, while others are arrested and quietly released. There are no public blacklists of banned operators, which would help prevent repeat offences. The absence of such measures enables fraudsters to return under new names and continue defrauding the public. Frustrating right!
To reverse this trend, I am convinced that a comprehensive approach is needed—rooted in education, regulation and enforcement.
Financial literacy must be prioritised. Nigerians need to understand the basics: that high returns often mean high risk. This knowledge should be spread not just online, but through schools, community forums, and the media. Education must be localised and relatable, delivered in accessible formats and languages.
Regulators must also step up. The SEC under Director-General, Dr. Emomotimi Agama must expand its capacity to monitor digital and informal financial activities. It must work closely with payment providers, banks, and social media platforms to flag these fraudulent schemes.
Equally important is enforcement. When fraud is committed, culprits must face the law. Prosecutions must be transparent and swift, and outcomes must be publicised. This serves both as a deterrent and a reassurance to the public that fraud has consequences.
The media also has a crucial role. Journalists must investigate these schemes and explain their risks clearly. They must ask tough questions of regulators and press for accountability. The CBEX case should not fade into just another headline; it must catalyse a rethinking of how fraud is prevented and punished in Nigeria.
Financial fraud may never disappear entirely, but its impact can be minimised. The EFCC’s commitment to recovering investor funds is a good start, but broader reform is essential. Unless Nigeria builds a system grounded in proactive regulation, public education, and visible enforcement, Ponzi schemes will continue to thrive—and Nigerians will continue to pay the price.
