When some Nigerian investors took to the social media to lament how they were locked out of their accounts in the CBEX digital financial platform, it was apparent they had fallen victim to another Ponzi scheme. Trending videos from some of those affected showed frustrations with their inability to withdraw their investments highlighting fears that their money may have been lost.
Some of the investors who complained on the private messaging service telegram of the CBEX were told by the digital financial platform that the problem was as a result of hacking and that things would soon be restored.
Concerns on the fate of CBEX mounted when a popular X user wrote about an individual who reportedly invested $1, 000 and withdrew $5, 000. He further wrote, “Having done all the checks, the platform flies all the flags of a Ponzi scheme”.
But instead of normalcy being restored as promised, the platform was quick to crash. CBEX locked its telegram channels and restricted WhatsApp groups. It also curiously introduced a verification fee where users were asked to pay $100 or $200 to supposedly unlock $1, 000 and $2, 000 respectively.
These measures left investors without further doubt that they have been scammed of their hard-earned money by the phoney financial platform. Frustrated by the turn of events, some of them attacked the offices of the financial platform in Ibadan and Lagos, carting away chairs, air conditioners and solar panels in utter despair.
The crash of the CBEX platform yet adds to the list of fake digital financial investment platforms that swindled Nigerians of their hard-earned money and left sorrow and misery in their trail. CBEX launched in Nigeria in July 2024 promising investors 100 per cent returns on their investments within 30 days
It came with the usual strategy of encouraging users to refer others with promises of bonuses and rewards based on the size of their referral network. Early participants are paid from the contributions of new investors and those who benefitted become the mouthpiece of the scheme. The objective of this strategy is to spur spurs more investments and before you know it, the platform crashes with the funds of investors trapped. That was the ploy deployed by previous Ponzi scheme before the CBEX. And that was the pattern it adopted, followed and crashed out.
It is estimated that the CBEX may have carted away over N1.3 trillion from their wallet after crashing penultimate Monday.
Sadly, Nigerians are not new to this manner of investment scam. The Mavrodial Mondial Movement (MMM) had similarly debuted in 2015 promising mouth-watering returns of 30 per cent within 30 days. But in 2016, it abruptly froze its transactions leaving its investors estimated at over three million people stranded.
Of the N911.45 billion which the Nigeria Deposit Insurance Corporation (NDIC) estimated in 2022 to have been lost to Ponzi and other related fraudulent activities in the last 23 years, MMM alone accounted for N18 billion. Before the CBEX scam, Nigerians had severally fallen victims to other Ponzi schemes such as Twinkas, Ultimate Cyber, Givers Forum and Get Help Worldwide etc.
As I write, the running of similar fraudulent schemes cannot be ruled out. And the possibility of future victims looms large. Why this is so despite the bitter experiences of our people and in spite of warnings from relevant government agencies to investors to be wary of offers that look too good to be true will continue to divide opinion.
But much of the answer can be found in the bogus, unrealistic and quick returns to investments which the schemes offer prospective investors. That is the prime motivation. That is why those who opt for such schemes shun the conventional banks with their low returns on investments. The Ponzi schemes came with 100 or 30 per cent return on investment within 30 days.
So, it made better investment sense albeit foolishly, if they can reap such huge returns especially so when they can point at someone who had so benefitted. But the question such prospective investors failed to ask is the type of investment that will double returns in just 30 days. They should have interrogated the type of business that would enable the digital financial platform to double returns on investments within 30 days and still make its own profits to remain in business. That is where greed met ignorance.
Given the experiences of our citizens with such Ponzi schemes in the past, one had expected that some lessons would have been learnt and precautionary measures taken. But the experience of the CBEX crash does not bear this optimism out.
Curiously, most of those who patronised the CBEX scheme are urban dwellers as indicated by the pattern of attacks at the Ibadan and Lagos offices of the phoney company. The MMM scandal occurred barely nine years ago. There has been little change in demographics to suggest that most of the victims were not of age when it froze its transaction and shattered the future of its investors. Neither can it be claimed they had no information about the past.
Greed pushes Nigerians into investing in such supposedly high interest-yielding ventures without figuring out the impracticability of any business yielding such profit within that short time frame. It is possible a few of the victims may not have been privy to the previous experiences of Nigerians with such scheme. But then, the lure remains the quick return to investments in manners that defy economic and rational calculations.
This disposition is not entirely new. It tallies with the pervasive culture of corner cutting and quick fixes. You may even be surprised at the manner experts who are more versed in such investment matters may be dismissed if they try to discourage those eager to invest in such schemes. That shows the value we place on knowledge and expertise.
That is not to diminish the importance of sensitisation programmes from the Securities and Exchange Commission (SEC), the Economic and Financial Crimes Commission (EFCC) and other relevant agencies of the government.
In March, the EFCC warned on the activities of about 58 illegal Ponzi scheme operators in the country. It said these companies were operating without registration with the Central Bank of Nigeria (CBN) or the SEC and have been identified as potential threats to the financial wellbeing of unsuspecting Nigerians. But CBEX was not listed among the 58.
A breakdown of the list showed their activities spanned various sectors such as agriculture, finance, oil and gas, books etc.
From the diverse fields they operate and the activities they purport to engage in, it will be very hard for investors to draw a line between the genuine and fake ones. In this list is a preponderance of agricultural companies that do not promise quick returns on investments but are still out there to scam the people. That is the real danger facing genuine investors. And that is why serious sensitisation programmes have to be called into quick action.
SEC said its long-term goal is to launch a capital market radio to educate investors and ensure that Ponzi schemes are completely taken down. This is heart-warning. But the time for the capital market radio is now. We cannot continue to harbour the huge losses Nigerian investors incur each time their money gets trapped in the vaults of Ponzi schemes due to their inability to differentiate between the fakes and genuine investments.
The N10 billion that the Senate approved for the commission to embark on market education programmes should be quickly deployed to the desired end. The relative ease with which Ponzi schemes operate within our shores, scam investors and disappear, point to something untoward about the monitoring roles of the relevant agencies of government. The SEC, EFCC and the CBN should publish dedicated telephone lines through which Nigerians can ask questions on future investments.
CEBX had offices in Ibadan and Lagos. People manned those offices for the period of their ill-fated operations without detection by any of the government agencies. That says a lot. It is good a thing that SEC is considering the establishment of more offices across the country to get closer to the people. With such offices and effective monitoring, it will be easier to detect the existence of fake financial investment companies before they scam unsuspecting investors.
But these fraudulent activities thrive because of the ease with which they evade justice. Nigerians lost huge sums of money to MMM and till date nothing came out of it. CBEX is following the same line. The EFCC said it is working with Interpol and other development agencies to bring to book those behind the scam. We wait for the outcome.
But the psyche of our people needs serious rejig. The pervading culture that wealth can be procured through quick fixes-money doubling, ritual killings, Yahoo, organ harvesting, kidnapping and sundry criminalities is behind it all. Public celebration of huge quantities of cash is part of it. That is the war Governor Chukwuma Soludo is currently waging in Anambra State. That war against moral atrophy requires national dimension.
