IT was the great Indian Nationalist, Mahatma Ghandhi, who said in one of his popular quotes: “There is a sufficiency in the world for man’s need but not for man’s greed.” Ghandi was born October 2, 1869 in Porbandar, India, and died January 30, 1948.
A lawyer, politician, social activist, and writer, he became the leader of the Indian Independence Movement against British rule and as such, was considered the father of the nation. He was also revered worldwide for his doctrine of non-violent protest to achieve political and social progress. In the eyes of millions of fellow Indians, Ghandhi was the Mahatma {Great Soul) adored by his people. In his life time, he led a simple life, devoid of ostentation and greed.
His doctrine and simple lifestyle, however, does not seem to jell well amongst Nigerians. Many of my compatriots in this part of the world are always on the lookout for fast business ideas or scheme that would generate huge returns in a heartbeat. To many of them, this life is all about making money and more money. In their quest for money, many have sold their souls to the devil whilst others have fallen victims to fellow desperados. In Nigeria, we are comfortable becoming wealthy on the sweat of fellow human beings.
Many of us are in the business of ‘manufacturing’ fake drugs and other household consumables that could kill others just to make financial gains. Some actually kill others for rituals in their quest to get rich quick. Some are fraudsters, making money illegally from fellow Nigerians and foreigners, earning us a bad reputation globally. The most lucrative of all these days is kidnapping for ransom – with some of the victims never returning to freedom. To many of these groups of people, the end justifies the means.
The latest scam that has gone bust is Crypto Bridge Exchange, CBEX, which has left over 600,000 Nigerians stranded after investments in the region of N1.3 trillion disappeared into thin air. Though a Chinese Company, the promoters of CBEX in Nigeria operated under a company registered as ST Technologies International Limited. ST Technologies was registered with the Corporate Affairs Commission on September 25, 2024, and also with the Economic and Financial Crimes Commission’s Special Control Unit Against Money Laundering on January 16, 2025.
ST Technologies International Limited Company has Registration No. 7955973.
Similarly, the EFCC’s certificate of January 16, 2025, stated, “ST Technologies International Limited has been duly registered in accordance with the provisions of Section 17(2)(a) of the Money Laundering (Prevention and Prohibition) Act 2022, and any other applicable law or regulation.”
For the most part of last week, many CBEX investors, no, greedy Nigerians, who are sweet talk into an investment that promises 100 per cent return in 30 days have been weeping and wailing. From the rich and the educated to the illiterate members of the public, the gullible and the greedy fell for the scam and are now paying dearly for it. To take part in the scheme, investors need a minimum trading amount of $100, which matured for cash-out with profit after 30 days.
The Yoruba have a saying that people should be aware of those that promises them to turn 20 into 40 overnight (So Ogun Di Ogoji). But many Nigerians won’t listen.
The term “Ponzi scheme” originates from Charles Ponzi, who infamously defrauded investors in the 1920s by promising astronomical returns, paying early investors with the money of new recruits. When recruitment slowed, the scheme collapsed. This simple but dangerous formula has thrived in Nigeria since the 1980s, and what started as small-scale scams has evolved into increasingly sophisticated, large-scale digital platforms like CBEX, the latest Ponzi behemoth.
The 1980s saw one of Nigeria’s earliest recorded Ponzi schemes, Umanah Umanah, which set the stage for the decades of fraud to follow. Promising high returns on investment, many were drawn into and it eventually collapsed, leaving a significant number of people in financial ruin. However, estimates of losses remain undetermined, and the number of victims is largely unknown. This was just the beginning.
By 2015, Ponzi schemes in Nigeria had become more organised and widespread, with the arrival of MMM Nigeria. The Russian-originated scheme promised 30% monthly returns through a peer-to-peer donation model, which quickly attracted over three million Nigerians. In December 2016, it crashed, leaving a trail of destruction and estimated losses of N18 billion ($11, 160, 000 million). Yet, this was not an isolated incident.
As the digital age gained momentum, so did the sophistication of scams. Following the collapse of MMM, several copycat schemes emerged, using referral-based models and matrix systems. Twinkas, Ultimate Cycler, and Get Help Worldwide were amongst the most notorious, with Twinkas alone defrauding thousands of Nigerians of hundreds of millions of naira. The wave of digital scams continued to grow, but Nigerians, lured by the promise of quick wealth, remained vulnerable.
In 2019, another scam, Loom Money, swept through social media platforms like WhatsApp and Facebook. With promises of 800% returns in just 48 hours, it preyed on the desperation of individuals seeking an escape from Nigeria’s pressing economic difficulties. Again, Loom Money collapsed and left countless investors empty-handed, with losses estimated at N2 billion. Yet, these scams were merely a precursor to the most devastating Ponzi scheme Nigeria would face.
The MBA Forex, which operated between 2018 and 2020, promised a 15% monthly return on forex trading investments. The company ultimately defrauded investors of a staggering N213 billion. Protests erupted at the Economic and Financial Crimes Commission (EFCC), with victims demanding justice for their massive losses. But the regulator, though aware of the growing threat, struggled to keep pace with the fast-evolving landscape of digital fraud.
The Nigeria Deposit Insurance Corporation (NDIC) estimates that Nigerians have lost N911.45 billion to Ponzi schemes over 23 years, with CBEX pushing the total well beyond N2 trillion.
Many Nigerians, facing crippling inflation, an unstable naira, and high unemployment rate, are drawn to the promise of quick wealth. But they forget the simple rule: When it seems too good to be true, it probably is a scam that people should run away from. But that is when many Nigerians would want to try their luck, and in the process, have their fingers burnt.
Recognising a Ponzi scheme is crucial, and the EFCC recently offered a useful checklist to investors on what to look out for in schemes offering any tempting investment opportunities. These include: Unrealistic returns, unregistered operations, pressure to recruit, digital-only platforms, and unclear business models. Despite these red flags, greed and lack of basic economic principles make more and more Nigerians to continue to fall victims to scammers. Many are still tempted to invest, driven by the fear of missing out on what seems like a once-in-a-lifetime opportunity. Greed.
The crash of the CBEX ponzi scheme has sparked a wave of protests and looting across several states. One of the most notable incidents occurred in Ibadan, Oyo State, where the CBEX office located in Oke-Ado was looted by angry investors and residents last week. A large crowd of angry investors broke into the building, destroyed equipment, and carted away office property.
Videos of the incident have since gone viral on social media, showing looters dismantling furniture and carrying items out of the premises. The looting extended to nearby shops and buildings before security operatives arrived to disperse the crowd. Now, the police and other security operatives are keeping vigil at CBEX offices across the country.
Again, the crash of the CBEX scheme has raised questions about the ability of the regulatory authorities to curb the rising wave of Ponzi schemes in the country. Although the Nigeria Security and Exchange Commission (SEC), came out to say that CBEX was not licenced to operate in Nigeria, what was the agency doing when it started mobilising funds from Nigerians? There were signs worldwide that the operations of CBEX may not conform with extant laws.
In April 2024, the Hong Kong Securities and Futures Commission (SFC) issued a warning against CBEX Group and Bitget Pro for suspected virtual asset-related fraudulent activities. The SFC reported that investors faced difficulties with withdrawals and unauthorised transactions. The commission also noted that CBEX falsely claimed to hold digital asset licenses in Canada and Japan which was discovered to be false.
Just few weeks back, President Bola Ahmed Tinubu signed the newly enacted Investments and Securities Act, 2025 (ISA 2025). The law empowers the Securities and Exchange Commission (SEC) as the apex regulator of the capital market, to register and regulate securities exchanges, commodity exchanges, virtual and digital asset exchanges, and other market venues.
The law makes it illegal to operate digital asset exchanges or online foreign exchange trading platforms without formal registration with the Commission.
The Commission had noted that, “under the newly enacted legislation, the Securities and Exchange Commission (SEC) is now empowered to regulate a broader scope of market activities”, adding that promoters and operators of Ponzi schemes under the new law, face a jail term of 10 years or more.
The SEC further explained that the law stipulates a minimum fine of N20 million for anyone operating a Ponzi scheme in Nigeria. But in spite of the law, regulatory agencies still allow many Nigerians to fall victims to CBEX.
While many Nigerians are interested in investing in the country, Banks have made savings and other forms of investments unattractive in the country with their unreasonable charges. A saving of just N50,000 with most Nigerian Banks will start depleting within the twinkle of an eye, and before you know it, N50,000 has reduced to N45,865. Charges such as card maintenance , ATM withdrawal, stamp duty, and a legion of others rapidly deplete depositors’ money, making average Nigerians to now avoid most commercial Banks in the country and preferring to keep their money at home under mattresses and inside their pillows. Savings accounts that should attract some interest are no longer forthcoming, and the little they pay to those with fixed funds is nothing to write home about.
Those still using the banking system complain daily. Yet, yearly, most of the Banks declare huge figures as profits and dividends payable to their shareholders. While the EFCC has promised to assist defrauded Nigerians to retrieve their funds from CBEX, it is doubtful if any tangible result would come out of the exercise.
What they should do more is to stop any Ponzi scheme from taking off in Nigeria before Nigerians are drawn into it. The security and Exchange Commission (SEC) should carry out more enlightenment campaigns to dissuade Nigerians from all these tricksters posing as investment houses. It is however certain that no matter the level of education and enlightenment campaign by those in authority, the greed of most Nigerians would not allow them to think rationally when it comes to making quick money from Ponzi schemes. CBEX is not the first time Nigerians would lose funds to Ponzi schemes and it would definitely not be the last.
See you next week.
- Akintunde is the Publisher and Editor-in-Chief of Glittersonline newspaper. His syndicated column, Monday Discourse, appears on News Point Nigeria newspaper on Mondays.