A CAREFULLY crafted illusion of prosperity has crumbled—leaving behind heartbreak, looted offices, and shattered financial dreams. From Lagos to Ibadan, investors who once believed in CBEX’s promise of digital wealth are now grappling with the reality of a scam that siphoned off an estimated ₦1.3 trillion, or $847 million, in what is shaping up to be one of Nigeria’s most audacious investment frauds.
The collapse of the CBEX trading platform earlier this April triggered immediate chaos. In Ibadan, furious investors stormed what they believed to be the platform’s office in Oke Ado. Eyewitness footage showed a mob ransacking furniture and equipment—symbolic of the deep financial and emotional loss suffered by thousands across the country.
CBEX, short for China Beijing Equity Exchange, operated under a misleading identity. Despite bearing a name similar to a legitimate Chinese financial institution, the Nigerian variant was neither licensed nor registered with the Securities and Exchange Commission (SEC). Instead, it thrived on aggressive digital marketing, false promises of 100% returns in 30 days, and an intricate referral system that rewarded investors for recruiting new participants—a textbook Ponzi model.
CBEX’s platform purportedly harnessed Artificial Intelligence to generate consistent trading profits. Investors could only participate via USD payments, often through the TRON blockchain (TRX). The referral-driven structure offered bonuses and increased withdrawal limits for users who recruited others, creating a cycle of exponential growth reliant not on genuine returns, but on fresh deposits.
Verification tiers—costing $100 or $200—were introduced as gatekeeping mechanisms. Users were told they could only withdraw once verified, locking more funds into the system. When withdrawals were eventually suspended in April 2025 under the guise of “system upgrades,” panic spread.
A blockchain analysis revealed that funds were being transferred from users’ wallets to a TRX address—TDqSquXBgUCLYvYC4XZgrprLK589dkhSCf—and then converted into USDT, Ethereum, and other currencies to obscure their trail.
“They designed the platform to look like ByBit to lure people,” said cryptocurrency analyst Taiwo Owolabi during a public Twitter Space. “It was all smoke and mirrors. The numbers users saw were just that—numbers.”
The Securities and Exchange Commission, in a statement following the platform’s crash, warned that digital asset platforms operating without proper registration are illegal.
“By virtue of the ISA 2025, it is an offence in Nigeria for any entity that is not registered by the Commission to carry out the business of online foreign exchange trading or related services,” it stated.
Under the new Investments and Securities Act signed into law by President Bola Tinubu, the SEC now has extended authority to regulate digital asset exchanges, impose fines of up to ₦20 million, and pursue criminal sanctions including up to 10 years’ imprisonment for offenders. The Act also empowers the Commission to collaborate with telecom providers to trace fraudulent schemes—a move seen as pivotal in an era where online scams thrive via encrypted communication and cloud storage.
CBEX is the latest in a string of high-profile Ponzi schemes that have plagued Nigeria over the past three decades.
From the infamous MMM scheme that collapsed in 2016 with estimated losses of up to ₦18 billion, to MBA Forex and Racksterli, Nigerians have been repeatedly drawn into similar webs of deception.
According to a report by The Guardian Nigeria, Michael Oladele, Director of the Bank Examination Department at the Nigeria Deposit Insurance Corporation (NDIC), disclosed that Nigerians lost approximately #911.45 billion to various Ponzi schemes and related frauds over a span of 23 years. This figure includes #700 billion reportedly trapped in private placements in 2016, #18 billion lost to MMM, #171 billion to MBA Forex, and #22.45 billion to Nospecto.
Furthermore, the Economic and Financial Crimes Commission (EFCC) declared Maxwell Odum, CEO of MBA Capital and Trading Limited, wanted over an alleged fraud amounting to #213 billion.
In 2019, the Securities and Exchange Commission (SEC) of Nigeria intensified its crackdown on Ponzi schemes, blocking assets valued at approximately #2.35 billion. This included #1.12 billion in various bank accounts and real estate properties worth #1.23 billion linked to operators of such fraudulent schemes. Despite these efforts, prosecutions remain rare, and the recovery of funds for victims is almost non-existent, as complicity by financial institutions continues to frustrate regulatory actions
Beyond the staggering financial loss, the human cost of CBEX is still unfolding. Several victims have shared their stories on social media—some lost life savings, others borrowed heavily or sold property to “invest.”
The psychological impact has been profound, especially for low-income individuals who saw CBEX as a ticket out of poverty.
“The pain is not just the money—it’s the trust,” said one Lagos-based investor who preferred to remain anonymous. “You tell your friends and family about this thing. Then it crashes, and you feel like you destroyed lives.”
Others have responded with anger rather than despair. The looting of the CBEX office in Ibadan was driven not only by financial loss, but also by the collective sense of betrayal.
Economic hardship remains a fertile breeding ground for such scams. Nigeria’s inflation rate stood at 23.18% as of February 2025, according to the National Bureau of Statistics (NBS) . Youth unemployment, while officially reported at 6.5% in Q2 2024, has been a subject of debate, with some sources suggesting higher figures. In such conditions, the lure of fast profits is hard to resist.
Financial illiteracy compounds the problem. Many citizens cannot distinguish between regulated investments and fraudulent schemes.
The SEC has launched investor education campaigns, but their reach remains limited, especially outside urban centres.
Ponzi schemes have also evolved with the times. Where MMM relied on church-based networks and SMS alerts, CBEX used Telegram, Facebook ads, and influencer marketing to gain traction.
“The strategies have changed, but the intent remains the same—promise the moon, deliver disaster,” said a financial educator based in Abuja.
Experts argue that combating digital Ponzi schemes will require a multi-pronged approach: tighter regulations, improved surveillance of online platforms, greater financial education, and swifter enforcement. The ISA 2025 is a step in the right direction, but only sustained implementation will deter future schemes.
Legal reforms alone are not enough. Technology providers, including mobile networks and payment processors, must be more proactive in identifying and reporting suspicious activities. Banks, too, must enhance due diligence when opening accounts or facilitating transfers for unlicensed platforms.
Until then, the CBEX saga serves as a painful reminder of how digital sophistication, economic desperation, and regulatory loopholes can combine to devastating effect.
As thousands continue to chase refunds that may never come, the CBEX collapse underscores an urgent question for Africa’s largest economy: how many more must lose everything before the cycle ends?
