BREAKING: CBEX: Shiny Promises, Bitter End Like MMM
In the fast-paced world of financial promises and digital investments, the name CBEX recently joined the notorious Ponzi scheme list that has left countless Nigerian investors heartbroken and financially devastated.
CBEX, short for “Crypto Block Exchange,” positioned itself as a lucrative digital investment platform, promising Nigerians extraordinary returns on their capital through what it claimed were crypto trading, AI-driven arbitrage, and blockchain-powered assets.
For many, the memory of MMM, the Russian-rooted Ponzi scheme that crashed in Nigeria in 2016, was still fresh, but CBEX’s polished branding and tech jargon gave it the appearance of credibility.
Ponzi Scheme Defined
A Ponzi scheme is a type of financial fraud where returns are paid to earlier investors using the capital of newer investors, rather than from any legitimate profit earned by the organisation.
The scheme relies on a constant influx of new money to continue paying returns to the earlier participants.
The scheme collapses when new investments’ flow slows down or the orchestrators can no longer make payouts, leaving investors with significant financial losses.
The Promise
Ponzi schemes have long been a dark cloud in financial scams, and Nigeria is no exception to this troubling phenomenon. Despite efforts to combat such fraudulent activities, Ponzi schemes continue to thrive due to their alluring promises of high returns with little or no risk.
For many Nigerians, the promise of quick wealth leads to the temptation to invest in these schemes, often without understanding the risks involved. This article will explore the operation of Ponzi schemes in Nigeria, the risks they pose, and how individuals can protect themselves from falling victim.
CBEX lured its victims with typical bait: invest as little as ₦10,000 and earn up to 20-30% returns within days, no work required.
The platform capitalised on social media influencers, targeted WhatsApp and Telegram groups, and even ran flashy online ads. Early investors, as usual, were paid handsomely — but the catch was that the money came from new deposits rather than real profits.
The scheme snowballed rapidly. Thousands across the country were drawn in, from students to civil servants, even retirees. Victims recount stories of being encouraged to “upgrade” to higher tiers for even greater returns, some selling personal assets or taking loans to scale their investment.
The Bitter End
Just like its infamous predecessor, MMM, CBEX collapsed when the influx of new investors dried up. Withdrawals were suddenly “paused for system maintenance,” websites went offline, and investor funds vanished into thin air. WhatsApp group admins who once hyped the scheme either went silent or exited the groups entirely.
Financial experts have since confirmed CBEX was a textbook Ponzi setup: no legitimate trading, no regulatory approval from the Securities and Exchange Commission (SEC), and no transparency.
“These schemes are designed to collapse,” says a Lagos-based financial analyst, Dr. Ifeanyi Okafor.
“They prey on people’s desperation and greed, especially in a tough economy.”
A National Pattern
CBEX is not the first, and sadly, it won’t be the last. Nigeria has become a fertile ground for Ponzi schemes, fueled by a mix of high unemployment, rising living costs, and weak regulatory enforcement. From Ultimate Cycler to Loom Money, the cycle of false hope and financial loss has repeated itself, with each scheme promising to be more sophisticated than the last.
The Economic and Financial Crimes Commission (EFCC) has repeatedly warned Nigerians about the risks, but for many, the temptation of easy money still proves irresistible.
How Ponzi Schemes Operate in Nigeria
In Nigeria, Ponzi schemes frequently masquerade as legitimate investment opportunities. Here are some key ways they function:
High Return Promises: Ponzi schemes in Nigeria often lure investors with promises of ridiculously high returns on investments in a short period, such as 20%, 50%, or even more per month. These offers appeal to individuals seeking ways to rapidly accumulate wealth, particularly in an economy where inflation and unemployment rates are high.
Word of Mouth and Social Media: Many Ponzi schemes utilise word-of-mouth marketing and social media to disseminate their message.
Testimonials from purportedly successful investors often portray an image of financial freedom, encouraging others to invest without hesitation.
No Clear Business Model: Ponzi schemes in Nigeria often lack a legitimate business model.
They may promise investments in everything from real estate to agriculture, technology, and cryptocurrency, but upon closer inspection, there is little or no transparency about how these businesses operate or generate profits.
Pressure Tactics: Investors are often encouraged to recruit others in exchange for more significant returns.
The scheme grows as more people join, relying heavily on the recruitment of new members to generate the capital needed to pay returns to older investors.
Fake Documentation: Some Ponzi schemes in Nigeria may use counterfeit certificates, contracts, or government registrations to appear legitimate, even though they are not. They might even promise to pay investors’ “initial investment” after a set period, but in reality, this is just a ploy to get more money.
Lessons Unlearned
The crash of CBEX highlights once again the urgent need for widespread financial literacy and tougher regulatory action.
As scammers evolve, ordinary Nigerians must remain vigilant and sceptical of any investment promising unrealistic returns without verifiable business models.
“If it sounds too good to be true,” Dr. Okafor concludes, “it usually is.”
Risks and Consequences
Ponzi schemes pose serious financial risks, both to individual investors and to the economy as a whole. The consequences of falling victim to such scams can be devastating:
Financial Loss: Most investors in Ponzi schemes eventually lose their money. Since the returns promised are often unrealistic and unsustainable, the scheme will inevitably collapse, leaving participants with nothing.
Reputational Damage: Individuals who invest in Ponzi schemes may face damage to their personal reputation if they try to recruit others or unknowingly promote a fraudulent investment opportunity.
Legal Ramifications: Participating in a Ponzi scheme could lead to legal issues, as many of these schemes are illegal. Authorities in Nigeria may prosecute individuals who are found to be operating or promoting such schemes.
Psychological Impact: The emotional toll of losing significant amounts of money in a Ponzi scheme can be severe. Victims may experience stress, anxiety, and a loss of confidence in future financial decisions.
People Should Get Skills And Shun Ponzi
In an exclusive interview with Naija News correspondent, Crypto trader and personal development enthusiast, Jackto Precious, regretted how gullible Nigerians fall victim to Ponzi schemes.
He advised that individuals should invest in knowledge and skills rather than looking for quick money.
Commenting on the recent CBEX saga, Precious said: “It’s a ponzi for sure. I recommend that people should equip themselves with the knowledge and skills
“Only true that they can grow their income.”
My Painful CBEX Experience – Victim Shares
A victim of the CBEX scam, Mary Ele, shared how she lost her savings and money borrowed from friends, including a loan from CBEX.
In a chat with Naija News, Ele said: “I never thought I’d find myself writing something like this, but the pain and loss I’ve endured through CBEX still haunt me, and if sharing my experience can help someone else avoid the same fate, then it’s worth it.
“It all started when I came across CBEX through a friend’s recommendation. Their website looked professional, promising high returns on cryptocurrency investments, and the testimonials seemed genuine. I was skeptical at first, but after some small test deposits and a few successful withdrawals, I started to trust the platform.
“That trust cost me everything.”
Sharing further, she said: “After my initial ‘success,’ I decided to invest more, much more. I used my savings, borrowed from friends, and even took out a loan, all because CBEX kept luring me in with promises of higher profits, VIP membership bonuses, and limited-time offers that seemed too good to pass up. Their customer support was always friendly, even reassuring me during minor doubts.
“Then came the day the withdrawals stopped.
“At first, they blamed ‘system upgrades.’ Then ‘network congestion.’ Then ‘regulatory issues.’ Each excuse sounded more fabricated than the last. Eventually, all communication stopped. My dashboard still showed my money ‘growing,’ but I could no longer withdraw a single cent. My account was locked, and I was left with nothing but debt and regret.
“The psychological toll was even worse than the financial one. I lost sleep, I lost friends, and I lost confidence in myself. Reporting the fraud didn’t yield much, and by the time I realised it was all a scam, CBEX had already vanished, leaving countless victims like me in silence and shame.
“If you’re reading this and considering investing with CBEX or any platform that feels too good to be true, please don’t make the same mistake I did. No legitimate investment should require blind faith or pressure you into investing more for the sake of “unlocking” your money. Learn from my pain before it becomes yours.”
Red Flags to Watch Out For
Knowing how to identify the warning signs of a Ponzi scheme can help individuals avoid falling into a trap. Some key red flags include:
Unrealistic Returns: If the investment opportunity promises returns that seem too good to be true, they probably are. A typical Ponzi scheme might promise returns of 50%, 100%, or even more in a very short time.
Lack of Transparency: If the scheme lacks clear, detailed information about how the business operates, how profits are generated, and what risks are involved, it’s a major red flag.
Pressure to Recruit: If the investment opportunity requires you to recruit others to earn money, it could be a Ponzi scheme. Legitimate investments do not rely on new participants to pay existing ones.
No Regulation or Registration: A legitimate investment firm should be regulated by the appropriate authorities in Nigeria, such as the Securities and Exchange Commission (SEC). If a company is not registered or does not provide information about its regulatory status, be cautious.
Withdrawal Problems: If investors encounter difficulty withdrawing their earnings or principal investment, it’s a sign that something is wrong. Ponzi schemes often restrict or delay withdrawals to maintain the illusion of legitimacy.
How to Protect Yourself from Ponzi Schemes
Protecting yourself from Ponzi schemes in Nigeria involves exercising caution and due diligence before investing in any opportunity. Here are some practical steps:
Research Thoroughly: Always investigate the background of any investment opportunity. Look for reviews, testimonies, and any reports from regulatory bodies like the SEC or the Central Bank of Nigeria (CBN).
Consult Professionals: Seek advice from financial experts or certified investment advisors who can help evaluate the legitimacy of an investment opportunity.
Avoid “Too Good to Be True” Offers: If an investment promises extremely high returns with little or no risk, it’s best to avoid it.
Report Suspicious Activities: If you encounter a Ponzi scheme or fraudulent investment, report it to the relevant authorities immediately, such as the Securities and Exchange Commission (SEC), the Economic and Financial Crimes Commission (EFCC), or the Nigeria Police Force.
Naija News reports that Ponzi schemes continue to pose a significant threat to investors in Nigeria, particularly given the widespread use of social media and the promise of high returns in an uncertain economic environment.
However, by educating oneself about the nature of these schemes, recognising the red flags, and taking proactive steps, Nigerians can protect themselves from falling prey to these fraudulent activities.
If you’re considering making an investment, take your time to research thoroughly, consult with professionals, and always be sceptical of promises that seem too good to be true. Stay safe, stay informed, and protect your financial future.
