How Crypto Bridge Exchange ‘CBEX’ Operators Enticed Victims –SEC
- Why Ponzi schemes thrive- experts
- EFCC Working With Interpol
The Securities and Exchange Commission (SEC) says preliminary investigations revealed that Crypto Bridge Exchange, aka CBEX, engaged in promotional activities to create a ‘false perception of legitimacy’ to entice ‘unsuspecting’ Nigerians.
About N1.3trillion was reportedly wiped out from the investors’ account after the platform, which boasted of giving investors 100 per cent Return On Investment in 30 days crashed on Monday.
The SEC stated that CBEX was not granted registration by the commission at any time to operate as a Digital Assets Exchange.
In a circular dated April 17, 2025, the commission stated that its attention was drawn to recent media reports/publications on the activities of CBEX (Crypto Bridge Exchange).
According to the SEC, “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 agency said, “Preliminary investigations carried out by the commission have revealed that CBEX engaged in promotional activities to create a false perception of legitimacy, in order to entice unsuspecting members of the public into investing monies, with the promise of implausibly high guaranteed returns within a short timeframe.”
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.”
The SEC Director General, Dr. Emomotimi Agama, had recently said the commission is launching a more forceful and coordinated enforcement regime against unregistered and illegal “phony” investment schemes, otherwise known as ponzi schemes.
Agama said with the newly enacted Investments and Securities Act, 2025 (ISA 2025), the Commission now has enhanced powers to prosecute Ponzi schemes and their promoters.
He said investigations were ongoing on CBEX, adding that promoters of the failed scheme will not go scot-free.
Agama said the new law has given the commission more powers and blocked loopholes in emerging areas of virtual and digital assets.
Meanwhile some experts have unveiled why Ponzi scheme still thrive even when others have fallen victims previously.
Finance and investment experts have attributed the recurring cases of phony investment schemes to three main issues of financial illiteracy, greed and lack of culture of due process.
Against the background of this week’s collapse of Crypto Bridge Exchange (CBEX), experts said with its history of more than a century, phony investment schemes, otherwise known as Ponzi, have continued to thrive due to unbridled quest for unrealistic and unsustainable returns.
Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) also yesterday affirmed that neither CBEX nor its products and affiliated institutions were registered with the Commission, making their operations illegal.
The House of Representatives has also expressed dismay over the collapse of CBEX, trapping more than N1.3 trillion subscribers’ funds.
Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said people were falling victims due to lack of due diligence and attempt to bypass the formal, regulated channel.
“The public needs to be aware that regulated markets and regulators exist for the sole purpose of protecting them against losses from Ponzi schemes and the likes. Before one makes any investment, one needs to do some basic due diligence.
“For instance, before depositing money with any organisation, check the CBN website to be sure the organisation is licensed to collect money from the public. And if you want to buy shares or unit trusts or other capital market instruments, go the website of SEC to be sure the company you are dealing with is registered by SEC. This ensures the investor has a recourse in case of anything untoward.
“A lot of digital assets that are being floated are not regulated by anybody, so the people investing in them are taking huge risks, as we’ve now seen in the case of CBEX,” Amolegbe, a former president of Chartered Institute of Stockbrokers (CIS), said.
Managing Director, AIICO Capital, Dr. Femi Ademola, said greed and the quest for unrealistic return was the main reason behind Ponzi schemes.
“Ponzi schemes are not new to Nigeria and their unraveling isn’t a surprise either. What is surprising is the number of people that get caught up in these schemes every time. Ponzi scheme is believed to originate in the United States in the 1920s, so it is not a Nigerian thing. We have also seen recent unraveling of such schemes in the US. An example is the one ran by Bernie Madoff.
“Ponzi schemes always feed on investors’ greed and the search for unrealistic returns. People take unnecessary risks in the bid to make high returns but they fail to evaluate the potential loss from such endeavour.
“Ponzi comes in different disguise. Hence, it cannot be eliminated. Some come in terms of promised tangible assets, others come as digital assets or just financial assets. But what is common to all of them is that they all promise overly attractive return.
“My advice to investors is to match the promised return to their risk profile. Low-medium risk investors don’t have any reason to invest in any investment that promises overly high return. Such investors consider safe investment that at least assured them of the preservation of their principal. Medium risk may involve the allocation of some tail risk for some losses. Any high return seeking investor should also prepare for a potential downside that can be a total loss,” Ademola, a Chartered Financial Analyst (CFA), said.
Managing Director, HighCap Securities, Mr. David Adonri called for a two-way punishment for both the promoters of Ponzi schemes and subscribers to address the root cause of the recurring problem.
According to him, both the promoters and victims are culpable and any effective enforcement regime must address the two of them.
“I have no pity for 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,” Adonri said.
SEC stated that it was already investigating CBEX and its affiliated entities, adding that the individuals behind the failed scheme “will not go scot-free”.
Director General, Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, the Commission has now been empowered by the newly enacted Investments and Securities Act, 2025 (ISA 2025) to crack down on Ponzi schemes and illegal investment promoters.
“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,” Agama said.
CBEX, which also operated under the name ST Technologies International Ltd and brands such as Smart Treasure and Super Technology, was never registered by the SEC to operate as a Digital Assets Exchange, according to the Commission.
Preliminary investigations revealed that CBEX engaged in promotional tactics designed to create a false sense of legitimacy. It promised guaranteed high returns within short timeframes—an offer the SEC said is a common tactic used by Ponzi schemes to lure unsuspecting investors. The company has since failed to honour withdrawal requests and abruptly shut its physical offices amid growing complaints from subscribers.
The Commission said it is working with law enforcement agencies to initiate enforcement actions against CBEX, its affiliates, and its promoters.
Spokesman for the House of Representatives, Akintunde Rotimi, in a statement, said that the House empathises with citizens currently facing distress and uncertainty due to their involvement in the elaborate scam.
According to him, preliminary findings indicate that the platform, which is not registered with SEC deceptively adopted the name “CBEX,” though it bears no affiliation with the legitimate China Beijing Equity Exchange – a Chinese equity trading institution that has disavowed any involvement in digital asset trading or operations in Nigeria.
He said: “this large-scale fraudulent scheme, which promised unrealistic returns and preyed on public trust, highlights the growing risks posed by unregulated digital investment platforms.
“The House notes that the Economic and Financial Crimes Commission (EFCC) and the Nigeria Police Force have already commenced coordinated investigations, working in concert with Interpol to track the perpetrators, safeguard investors, and recover withheld funds where possible.
“We urge these agencies to sustain swift and effective action in identifying, apprehending, and prosecuting the masterminds behind this massive financial crime.
“The House also underscores the importance of the recently enacted Investment and Securities Act (ISA), 2025, signed into law by President Bola Ahmed Tinubu.
“This landmark legislation – resulting from sustained legislative efforts across the 8th, 9th, and 10th Assemblies – strengthens the SEC’s enforcement powers, criminalises Ponzi schemes and related frauds, and introduces stricter penalties, including up to ten years’ imprisonment.
“Through these reforms, the investor protection responsibility of the SEC has been enhanced, reinforcing its mandate to shield Nigerians from fraudulent investment activities”.
Chairman, House Committee on Capital Market and Institutions, Solomon Bob called for concerted efforts to confront financial fraud with the full weight of the law.
He highlighted the importance of public awareness noting that financial literacy is not optional; it is essential in building a resilient, inclusive economy.
“Fraudsters thrive where ignorance prevails. The House advises Nigerians to exercise utmost caution and verify all investment opportunities with the SEC and other regulators and remain vigilant to the hallmarks of fraud – especially promises of high returns with little or no risk.
“Furthermore, public figures, celebrities, and influencers are reminded of their civic and legal duties. Under the new ISA, promoting unregistered investment schemes could attract liability for aiding financial misrepresentation and consumer deception.
“The House calls on schools, faith-based organisations, media outlets, and civil society groups to support a national effort to promote financial education and protect the public from predatory schemes.
“In line with the 10th Assembly’s Legislative Agenda (2023-2027), particularly Agenda 4 on Economic Growth and Development, the House reaffirms its commitment to securing the financial welfare of Nigerians.
“We will continue to support sound legislation, strengthen regulatory frameworks, and promote capital markets that are safe, transparent, and inclusive,” Bob said.
Amid growing concerns over the alleged fraud perpetrated by a digital investment platform, CryptoBank Exchange (CBEX), which reportedly led to the loss of N1.3tn belonging to Nigerians investors, the Economic and Financial Crimes Commission (EFCC) says it warned Nigerians against investing in Ponzi schemes.
The spokesperson of the EFCC, Dele Oyewale, who spoke as a guest on Channels Television’s The Morning Brief on Wednesday, however, said that the Commission had taken steps to enlighten Nigerians about the dangers of the criminal schemes.
But Oyewale said, “You’ll recall that on March 11 this year, the Executive Chairman of the EFCC, Mr. Ola Olukoyede, had cause to instruct us to alert Nigerians about 58 Ponzi scheme companies; we came out with a list–that shows that we’re proactive and we have our hands on what is happening.
“So, concerning this CBEX thing, we’re on it; it’s not that we didn’t know, and you know we’ve been alerting Nigerians about ways and means to separate themselves from this type of shenanigans. So, before the calls came, we were working; while the calls were coming, we were working, and even after the calls, we’re still working.”
Speaking further, he said, “We cannot lay any blame on the EFCC concerning this CBEX thing. I’m sure we know that that business venture is a Chinese digital trading company with no jurisdictional link with Nigeria; all the area offices that people are saying are in Ibadan and in some other locations are not functional offices. The entire thing is online.
“And we have been warning Nigerians against criminal engagements online. So, what would you expect the EFCC to do? We have given empowerment, given enlightenment, given public awareness, and raised intelligence. It is to the credit of the EFCC chairman that he came forward to say that there are 58 companies that Nigerians are patronising that they should no longer patronise.
“So, if the commission is as proactive as that, then the rest is for the people concerned to be more vigilant and to ensure that they guard their investment in line with the information that is available.”
He further explained that the Investment and Security Act 2025 is a very important, well-conceived and responsive Act of the government to check illegal investment schemes.
According to him, with the Act, it is a criminal thing to engage in any digital trading activity without being licensed, without complying with all the extant laws, as any form of exchange or business engagement must conform with the Act.
Oyewale said, “We know that for every business concern, you declare your profit either quarterly, annually or bi-annually, but if somebody says, ‘Bring your money; I’m going to give you a return in 30 days, you know that is not realistic; it’s just not pragmatic.
“Or if somebody says if you bring your money, we’re going to give you a 100% return on investment, that is not possible; even we know that the prevailing interest rate in Nigeria is 27.5. So, how will somebody give you a 100% return on investment in 30 days?
“So if you want to go into any investment, you must look at these fellows that are parading this: how compliant are they with the Money Laundering Prevention and Prohibition Act 2022? How compliant are they with the Proceeds of Crime Act? How compliant are they with the Terrorism Financing Act? It is very important.
“Now, if they’re operating at variance with all of these laws, you know that it’s just a matter of time before a problem will come.”
He, however, assured that the EFCC is working with its international partners, including Interpol, to ensure that the victims get their money back.
“It would be very irresponsible and unprofessional of the EFCC to say you have lost your money and there is nothing the commission can do about it; we’re already working with Interpol and we’re already working with our international development agencies to ensure that these people are brought to book.
“Investors are going to get their money back and we’re already working on that. All I’m saying is that this kind of thing could have been averted, but we’re not going to throw our hands up helplessly to say that there’s nothing the EFCC can do about it. No, we’re more responsible; we are more professional than that,” the spokesperson said.
“So, we’ve spread our wings; we’re talking to Interpol, we’re talking to all the necessary agencies across the world to be able to bring all the actors to book and the investors are going to have their money back. It might not be in the short term, but I can assure you that the commission, as the leading anti-corruption agency in Nigeria, is not going to allow investors to just lose their money like that because they are not compliant. No. Escapism is not a solution to any problem,” he added.