BREAKING: CBEX Ponzi investment platform collapses, leaving investors $12 million poorer

In what has become an all-too-familiar story in Nigeria’s investment landscape, thousands of investors have been left financially devastated after CBEX, a cryptocurrency investment platform, collapsed in April 2025. The platform, which falsely presented itself as the “China Beijing Equity Exchange,” froze user accounts without warning, triggering widespread panic and protests at its offices in Ibadan and Lagos.

Initial reports claimed investors had lost up to ₦1.3 trillion (approximately $800 million). Cryptocurrency expert and security analyst Taiwo Owolabi has stated that “the total volume of stolen investors’ funds so far in USDT was $847 million and is likely to increase.”

However, other analyses by independent analyst Specter and further investigations by Techpoint Africa estimated the actual losses to be significantly lower—between $6.1 million and $12 million—though still substantial for the affected individuals. This discrepancy in reported losses highlights the confusion surrounding the scheme’s actual scale.

Red flags hidden behind the CBEX Scheme

CBEX operated a classic Ponzi scheme disguised as a sophisticated investment platform, promising investors 100% returns within 30 days through an alleged AI-driven trading strategy. The scheme gained credibility by appearing on state-owned media, where it was misleadingly described as a “poverty alleviation” program.

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Cryptocurrency expert Taiwo Owolabi explained the deceptive mechanics behind CBEX’s operations in an X Space: “They designed the weak website to convince people in the future that it was a security breach that affected them. Apparently, when you make payments, you pay them into a TRX account, and then, immediately, they move it from that TRX wallet, gather it, convert it to USDT, and then to ETH. So, when you are logging into your account, there is literally no money on your profile. What you see are just numbers. All the daily activities you do to ‘trade’ increase your money. All the AI trading is fake. When it’s time for withdrawal, they will send you another person’s money.”

According to multiple analyses recovered from social media warnings before the collapse, CBEX exhibited numerous red flags that experts had flagged:

• Unrealistic promises of 1.5% daily returns (equating to 45% monthly)
• Claims of 99.8% trading signal accuracy, when professional traders typically win only 4-7 trades out of 10
• Multiple websites with unclear ownership structures
• Absence from official app stores, requiring APK downloads
• No transparent founder information

Despite these signs, the platform attracted a broad audience, cutting across various social and economic classes, with some individuals reporting losses of tens of thousands of dollars.

CBEX published official-looking documents, including FinCEN registration and a certificate allegedly signed by the Colorado Secretary of State, to boost its image. While CBEX is listed on FinCEN’s database, U.S. authorities clarified that such registration does not equal legitimacy. Fake or misleading documentation is a common tactic among financial fraudsters.

Toward its final weeks, CBEX began advertising promotional bonuses tied to a supposed launch in the Asian market—a move intended to inject new cash into the system. Investors were told these perks were “usually reserved for VIPs,” but were now being extended to everyone. Conversations within user groups show people urging others to take advantage of these new bonuses—a hallmark of a Ponzi scheme approaching collapse, as it relies on fresh deposits to sustain payouts.

The scheme’s collapse has sparked outrage, with frustrated investors ransacking CBEX’s Ibadan office in Oke Ado. Following this, the CBEX office, located at Seliat Bus Stop in the Egbeda-Idimu area of Lagos State, was swarmed on Tuesday by aggrieved investors. Videos captured looters taking furniture and equipment while victims shared emotional testimonies online of lost savings and shattered financial hopes, including one woman who lost $1,000 saved from years working abroad.

“If it’s not registered, it’s Illegal” 

The Securities and Exchange Commission (SEC) had previously issued warnings about CBEX, stating the platform was not registered with the Commission. Condia reported that during a virtual engagement with fintech stakeholders on April 14, 2025, SEC Director General Emomotimi Agama emphasised that “if it is not registered, it is illegal.”

Under the newly signed Investment and Securities Act (ISA) 2025, approved by President Bola Tinubu, the SEC now has broader powers to regulate digital asset platforms. This includes prosecuting operators of unregistered platforms and Ponzi schemes, with penalties of up to ten years in prison and fines reaching ₦40 million.

The Commission reiterated that offering online foreign exchange trading or related services without SEC registration is a criminal offence. It also advised such businesses to contact its DRM Department to understand the registration process and avoid sanctions.

Nigeria’s Ponzi evolution is the same old tricks with new tech

CBEX follows a pattern similar to previous Nigerian Ponzi schemes like MMM, Twinkas, and Racksterli. These schemes typically spread through social media, offering unrealistic returns and using early investors’ profits to attract more participants before inevitably collapsing.

The CBEX case is particularly notable for its exploitation of technological buzzwords like “AI-powered crypto trading” and “blockchain analysis” to appear legitimate to a tech-savvy generation. Despite its sophisticated appearance, CBEX operated on the same basic principles as traditional Ponzi schemes.

The collapse of CBEX also highlights Nigeria’s vulnerability to such schemes, particularly in the context of the country’s growing interest in copy trading. Between 2004 and 2023, Google searches for “copy trading” from Nigeria surpassed those from the United States by 1,900%. This trend, coupled with a lack of financial literacy and regulatory oversight, creates an environment where fraudulent schemes can easily thrive.

CBEX’s collapse is part of a wider trend of cross-border crypto scams targeting emerging markets. Some wallets associated with CBEX have ties to Huione Pay—a Southeast Asian payment processor flagged for facilitating over $24 billion in suspicious transactions. The platform’s strategy mirrors tactics seen across the region: fake AI tools, copy-trading mirages, and inflated success rates. CBEX even claimed 99.8% trading signal accuracy—a statistical fantasy debunked by experts, as even seasoned traders typically win only 4 to 7 out of 10 trades.

Financial experts continue to emphasise the need for due diligence before investing in any platform. Investors are advised to check for proper registration with regulatory bodies like the SEC, be wary of promises of unrealistically high returns, and avoid investing more than they can afford to lose.

As the popular investment saying goes: “The bulls make money, the bears make money. The pigs get eaten.” This adage warns against the greed and recklessness that can lead to significant financial losses in investment schemes like CBEX.

The collapse of CBEX serves as yet another costly reminder that in financial markets, if something sounds too good to be true, it almost certainly is.