As thousands of Nigerian victims of the CBEX investment scam count their losses, Kayode Tokede captures the shock and the gnashing of teeth of gullible investors who walked their way into the sham investment trap despite repeated warnings of financial sector regulators

Before the recent uproar caused by investors’ inability to access their investments, many Nigerians had never heard of CryptoBank Hybrid Exchange, known to many Nigerians as CBEX.

CBEX was reported to have commenced in Nigeria in 2024, despite claims of existence since 2017, a timeline that contradicts its domain registration and distinguishes it from the legitimate China Beijing Equity Exchange.

A report has it that the platform aims to blend traditional banking services with cryptocurrency trading, offering features like deposits, withdrawals, transfers, and investments alongside a decentralised exchange (DEX) that allows trading without registration via Web3 wallets.

THISDAY gathered that recent data indicates low trading volume and limited market activity, with some platforms reporting a 24-hour volume of $0. Being a cryptocurrency, regulation becomes an issue.

In the case of CBEX, multiple investors took to the social media site to express their dissatisfaction following the suspension of the withdrawal feature on April 10, 2025.

Multiple reports have it that the digital asset trading platform gives investors 100 per cent Return On Investment (ROI) in 30 days.

A report said that the embattled platform allegedly swept away over N1.3 trillion from unsuspecting investors. Heartbreaking scenes on social media as investors in Nigeria weep and lament the loss of their life savings.

CBEX operated by a group of foreign nationals in collaboration with their Nigerian partners with offices in Lagos, Ibadan, Abuja, and other parts of the country, collapsed, leaving their investors stranded as they were unable to access their funds.

Recall that in the last eight years, Nigerians have been particularly susceptible to several Ponzi schemes. In 2016, it was Mundial Moneybox, MMM, before it crashed.

After MMM’s crash, Ultimate Cycler took root in Nigeria before it collapsed, with investors’ funds trapped. MBA Forex Trading and Capital Investment Limited, Twinkas, D9 Club, Famzhi Interbiz Limited, Red King’ Chinmark Group, Brisk Capital, and Ovaioza Farm Produce Storage are some of the Ponzi schemes that have defrauded thousands of Nigerians of funds amounting to billions of naira.

For CBEEX, trouble began when users started facing difficulties withdrawing funds from the platform. Shortly after, many discovered their account balances had mysteriously been reset to zero, sparking widespread panic.

CBEX, once touted as a trustworthy avenue for digital asset trading, has since gone dark with no official explanation or refund process announced.

As affected individuals seek answers and possible legal redress, financial experts continue to urge caution and due diligence before committing to any form of investment, especially those operating outside the regulatory oversight of the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).

Investments and Securities Act 2025

SEC had warned that the newly enacted Investments and Securities Act, 2025 (ISA 2025) has made it illegal to operate digital asset exchanges or online foreign exchange trading platforms without formal registration with the commission.

Signed into law by President Bola Tinubu, ISA 2025 significantly strengthens the regulatory framework governing Nigeria’s capital market, with a particular focus on digital finance.

The commission clarified that, under the new law, it is now an offence for any entity to operate an online forex trading platform or provide related services without prior registration with the Commission.

“Under this Act, 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 platforms or related services.

“Any business entity with the plan of setting up a business in any of these areas is advised to visit the HOD DRM Department of the Commission for further direction on how to register with the commission to avoid sanctions”, the commission added.

The commission noted that “under the newly enacted legislation, the SEC is now empowered to regulate a broader scope of market activities as Section 3(3)(b) of the Act explicitly mandates the commission to “register and regulate securities exchanges, commodity exchanges, virtual and digital asset exchanges, and other market venues.”

The Director General of the commission, Dr. Emomotimi Agama, described the new law as “a landmark step in positioning Nigeria’s capital market to be more inclusive, robust, and in tune with global best practices.”

He stated, “The ISA 2025 has given the commission the legal backing to provide clarity, ensure investor protection, and enhance market confidence, especially in new and previously unregulated segments such as digital asset exchanges and online foreign exchange platforms.”

The commission reaffirmed its commitment to supporting innovation while maintaining strict oversight. “We welcome innovation, but it must occur within a regulated environment that protects investors and maintains the integrity of our market,” Dr. Agama added.

“With ISA 2025 now in force, stakeholders in the financial and investment ecosystem are advised to familiarise themselves with the new provisions and ensure full compliance”, the SEC added.

The commission stated that its preliminary investigations revealed that CBEX engaged in promotional activities to create a false perception of legitimacy to entice unsuspecting members of the public into investing monies, with the promise of implausibly high guaranteed returns within a short timeframe.

The commission in a circular also disclosed that CBEX was not granted registration at any time to operate as a Digital Assets Exchange.

According to the SEC, CBEX, which also operates under the corporate identity of ST Technologies International Ltd, Smart Treasure/Super Technology, has held itself out as a digital asset trading platform, offering high returns to investors in Nigeria.

SEC in the circular explained that, “The commission hereby clarifies that neither CBEX nor its affiliates were granted registration by the commission at any time to operate as a Digital Assets Exchange, solicit investments from the public or perform any other function within the Nigerian capital market.

The SEC emphasised that pursuant to the provisions of Section 196 of the Investments and Securities Act 2025, the commission would collaborate with relevant law enforcement agencies to take appropriate enforcement action against the CBEX, its affiliates, and promoters.

“The commission uses this medium to remind the public to REFRAIN from investing in or dealing with any entity offering unrealistic returns or employing similar recruitment-based investment models. Prospective investors are advised to VERIFY the registration status of investment platforms via the Commission’s dedicated portal: www.sec.gov.ng/cmos before transacting with them”, the SEC added.

Capital market analysts, Managing Director, HighCap Securities, Mr. David Adonri, demanded a two-way punishment for both the promoters of Ponzi schemes and subscribers to address the root cause of the recurring problem.

He said that both the promoters and victims are culpable, and any effective enforcement regime must address both two of them.

Adonri said, “I do not pity the greedy people who were duped. Both the fraudsters and the victims should be punished accordingly. The fraudsters should be mercilessly dealt with for perpetrating fraud and robbery, while the victims should be punished for aiding and abetting fraud in Nigeria.

“Several campaigns have been done to warn people against Ponzi schemes and yet, the victims refused to heed the warning because of their greed and attempt to get rich quickly.”

EFCC to Probe CBEX

The Economic and Financial Crimes Commission (EFCC) and INTERPOL have commenced a probe of the recently crashed CBEX.

The spokesperson of EFCC, Dele Oyewale, in a statement, confirmed that the commission had already commenced an investigation into the scheme before its eventual collapse.

He explained that efforts were underway to arrest both the local and international operators behind the fraudulent scheme.

“We are actively working to handle the CBEX situation. We will collaborate with other regulatory agencies to ensure that Nigerians are protected from this kind of scheme. We will do our job—where recovery is possible, we will recover; where prosecution is possible, we will prosecute.

“Overall, we will do our best. Additionally, there are similar frauds across the country that people are unaware of, and we are working to uncover them. We are on the local collaborators while we are partnering with INTERPOL to trace the foreign operators,” he stated.

Oyewale further warned Nigerians to exercise caution before committing funds to any financial entity not duly registered with regulatory bodies.

“We urge the public to verify any investment opportunity with the CBN and SEC before engaging. The EFCC remains committed to safeguarding the public from predatory operators and ensuring a corruption-free economic environment,” the statement added.