SEC Unable To Recover £1.3 Trillion Lost In CBEX Ponzi Scheme Collapse.
In a devastating blow to thousands of Nigerian investors, the Securities and Exchange Commission (SEC) has confirmed it is unable to recover an estimated N1.3 trillion (£620 million) lost in the collapse of the digital investment platform CryptoBank Exchange (CBEX). The announcement, made by SEC Director General Dr. Emomotimi Agama, has sparked widespread dismay among victims of what has been described as one of Nigeria’s largest Ponzi schemes.
The CBEX platform, which lured investors with promises of 100% returns within 30 days, abruptly crashed on 14 April 2025, leaving users locked out of their accounts and their balances wiped to zero. Reports indicate that the platform, operated by a mix of foreign nationals and Nigerian partners, was unregistered and operated illegally, exploiting regulatory loopholes to amass vast sums from unsuspecting investors.
Dr. Agama, speaking at a press conference, expressed regret but emphasised that the SEC’s hands were tied due to CBEX’s unregistered status. “If a platform is not registered with the SEC, it is illegal, and our ability to intervene is severely limited,” he stated. “We have repeatedly warned Nigerians to avoid unregistered trading platforms, but the allure of quick profits continues to draw people in.”
The collapse has triggered outrage across Nigeria, with social media platforms flooded with stories of financial ruin. One victim, Oni Tolulope, told local media she had invested her house rent in CBEX, leaving her on the brink of homelessness. “I thought it was safe because it had been running for two years,” she said, lamenting the absence of red flags she now recognises. Another investor, identified as Ola, shared with BBC Pidgin that he lost N450,000 (£215), funds he had planned to withdraw just days before the crash.
The Economic and Financial Crimes Commission (EFCC) has launched a probe into the scam, collaborating with Interpol to track down both local and international perpetrators. EFCC spokesperson Dele Oyewale revealed that the agency had been monitoring CBEX prior to its collapse and is optimistic about recovering some funds. “Investors are going to get their money back,” Oyewale asserted, citing provisions in the newly enacted Investment and Securities Act (ISA) 2025, which imposes up to 10 years’ imprisonment and fines of N40 million (£19,000) on operators of unregistered platforms.
However, estimates of the total losses remain contentious. While some reports claim losses of N1.3 trillion, blockchain analysis by Techpoint Africa suggests the figure may be closer to $6.1 million (£4.6 million), with funds traced to wallets still receiving deposits. Cryptocurrency expert Taiwo Owolabi, however, pegged the stolen amount at $847 million (£640 million), highlighting the complexity of verifying the true scale of the fraud.
The CBEX debacle has reignited debates about Nigeria’s vulnerability to Ponzi schemes, with many pointing to economic hardship and financial illiteracy as key drivers. “Nigeria’s rising inflation and unemployment create a fertile ground for these scams,” said a Nairaland forum user, echoing sentiments that schemes like CBEX exploit the desperation of ordinary citizens. The collapse draws parallels to the 2016 MMM Ponzi scheme, which left millions with losses estimated at N18 billion (£8.6 million).
In response to the crisis, the SEC has urged prospective operators to register with its Digital Regulation and Monitoring Department to avoid sanctions. Dr. Agama also cautioned influencers against promoting unregistered platforms, warning of legal consequences. “The ISA 2025 gives us enhanced powers to protect investors, but public awareness is equally critical,” he added.
The CBEX scandal serves as a stark reminder of the risks posed by unregulated digital platforms. For now, thousands of Nigerians are left grappling with shattered dreams and an uncertain path to recovery, with many calling for stronger regulatory enforcement and financial education to prevent future tragedies.
