The recent collapse of the ‘fantastic’ investment company known as CBEX brings to the fore the attraction Nigerians have, for the get-rich-quick syndrome where thousands of them have had their fingers burnt. In spite of the losses others have made in the past to these schemes, be sure that even as we write, there are many Nigerians still investing in schemes of the Ponzi type and you will not hear of it until the bubble busts and their money evaporates.
CBEX (Crypto Business Exchange) was a major Ponzi scheme that ran in Nigeria for barely a year – 2024 to early 2025 but is reported to have resulted in losses by more than 600,000 Nigerians, up to the tune of more than ₦1.3 trillion (about $800 million), making it one of the largest financial frauds in Nigeria’s history. CBEX claimed to be an AI-powered crypto trading platform offering 100% return on investment in one month, with daily returns of 3.5%.
Last month, in the usual classic Ponzi style, CBEX abruptly disabled withdrawals, citing a “security breach.” Then it asked users to pay additional verification fees of $100–$200 to access their funds — a typical move in exit scams. The scheme finally collapsed.
The EFCC and INTERPOL are said to have launched investigations into the scam, but we are yet to hear about what will be done to console victims of the fraud.
There have been many Ponzis in the past – not only in Nigeria – after all, Ponzi is not a Nigerian name – but greed and lack of values have always been the underlying factors, not necessarily poverty or government policies, although people are also likely to say times are hard, with unemployment and high inflation.
A Ponzi scheme is a fraudulent investment fraud where returns to earlier investors are paid using money from new investors, rather than from legitimate business operations or profits. It is named after Charles Ponzi, who used a similar scheme in the early 20th century.
The perpetrator promises high returns with little or no risk, luring investors to put their money in. They then use the new investors’ money to pay the returns to the earlier investors, creating the illusion of a profitable investment.
Charles Ponzi was an Italian-born swindler best known for giving his name to the infamous “Ponzi scheme” — a type of financial fraud that lures investors with promises of high returns but pays them using the money from newer investors instead of actual profits.
In the early 1920s in the U.S., Ponzi convinced thousands of people to invest in a scheme involving international reply coupons (IRCs), claiming he could generate huge profits by exploiting exchange rate differences. While he did buy some IRCs, most of the money he collected was not invested — it was simply used to pay earlier investors and himself. At its peak, he was making millions in just a few months.
By mid-1920, his scheme unravelled under scrutiny from journalists and regulators. Ponzi was arrested, tried, and sentenced to prison. After serving time, he was deported to Italy and eventually ended up in Brazil, where he died in poverty.
His name has since become synonymous with fraudulent investment scams.
Nigeria has had its fare share of Ponzi schemes, resulting in huge losses and tears from those who lost and their families and businesses. Since the early 1990s when Ponzi schemes like Planwell and Money Tree hit Benin-City in Old Bendel State, many more have made people poorer. Remember the infamous Ponzi Scheme Operator in Calabar and Port harcourt, Umana Umana, who was sentenced to ten years imprisonment for his own scheme? He was like a king in the business.
Other notable schemes in Nigeria are MMM Nigeria from 2016 to 2017, Ultimate Cycler in 2016, Twinkas, in 2017, Loom Nigeria in 2019, MBA Forex and Capital Investment Ltd, 2018 and 2020, and many more.
Why do people always get caught in these financial scams? Of course, without sounding mean, it is good to say from the beginning that it takes two to tangle. In this case, there is an element of greed to make more profit than is reasonable for your investment. The decline in the value system also comes to play here, because there is a lingo called ‘Long-throat’ or greed. Almost everyone wants to make huge sums of money with little or no effort.
Aside the need to advise us on the need to imbibe the right values, investors should be wary of promises of high returns within short periods and shun platforms that depend on recruiting others to earn. While some of these schemes operate under strict secrecy, others are quite open and advertise their operations. Regulatory agencies should put in place strict and robust financial control to protect ignorant or innocent citizens from falling prey to the antics of Ponzi operators. There also ought to be regular publicised prosecution of those involved in this fraud so that they can pay for the pain they inflict on Nigerians.
The National Assembly also needs to do more by providing laws that will protect citizens from Ponzi schemes.
