Latest news with #CBEX
Zawya
10-07-2025
- Business
- Zawya
Senate probes Ponzi schemes in Nigeria, loss of $850mln to CBEX crash
Operators of Ponzi schemes in Nigeria have come under the Senate's spotlight following the passage of a resolution on Wednesday to investigate their activities and other similar online transactions that defraud investors of their hard-earned money. Of particular concern to the Senate is the recent collapse of the Crypto Bullion Exchange (CBEX), which resulted in Nigerian investors losing a staggering N1.3 trillion. Four Senate committees—Capital Market and Institutions; Banking, Insurance and Other Financial Institutions; Anti-Corruption and Financial Crimes; and ICT/Cybersecurity—were mandated on Wednesday to 'conduct a comprehensive investigative hearing, including public hearings, on the operations of Ponzi schemes in Nigeria' within the next four weeks. The resolution was passed while the Senate President, Godswill Akpabio, presided over the plenary. It followed a motion jointly sponsored by Senators Mukhail Adetokunbo Abiru (Lagos East) and Osita Izunaso (Imo West), drawing attention to the immense economic hardship caused by failed Ponzi schemes over the years. ALSO READ: Nigeria's automotive sector key to Nigeria's economic growth — Oyebanji The Senate expressed deep concern over the 'rapid proliferation and alarming rise of unregulated and fraudulent investment schemes—commonly known as Ponzi or pyramid schemes—such as MMM Nigeria in 2016 and MBA Forex in 2020, among others, which have repeatedly defrauded millions of Nigerians, causing severe financial hardship, and in some cases, leading to depression, family breakdowns, and even suicide.' The motion also noted the recent case of CBEX, a digital investment platform that lured millions of Nigerians with promises of outrageous returns before suddenly collapsing. The result: over N1.3 trillion (about $847 million) lost, making it one of the most devastating financial scams in the country's history. It further highlighted that the CBEX incident was not isolated but part of an existing and growing pattern of unregulated, tech-driven schemes leveraging social media, referral commissions, celebrity endorsements, and fake testimonials to deceive the public. Leading the debate, Senator Abiru expressed shock that such schemes could grow so rapidly despite supposed regulatory oversight by institutions such as the Central Bank of Nigeria (CBN). He questioned how CBEX continued to operate without sanctions from regulatory bodies like the Securities and Exchange Commission (SEC), CBN, the Nigerian Financial Intelligence Unit (NFIU), or the Economic and Financial Crimes Commission (EFCC). Abiru called it a failure of regulatory agencies and urged the National Assembly, as representatives of the people, to intervene through detailed investigations. 'The lack of coordinated oversight, real-time monitoring, and strict enforcement by relevant agencies has created an enabling environment for these schemes to flourish. This erodes public trust in legitimate financial institutions and poses systemic risks to the economy,' he added. Senate Whip, Senator Mohammed Monguno (Borno North), while contributing to the debate, observed that Ponzi operators take advantage of vulnerable and gullible Nigerians, defrauding them of their hard-earned money and even driving some to early graves. He called for tougher legislative measures to address the economic threats posed by these fraudulent schemes. Kwara State Senator, Sadiq Suleiman, urged the Senate to step in to protect Nigerians, many of whom he said are unaware of the risks involved in staking their limited resources on such online investments. 'We must continually monitor financial schemes to protect citizens. Our agencies must rise to the occasion and carry out their regulatory functions,' he said. Senator Solomon Olamilekan (Ogun West), Chairman of the Senate Committee on Appropriations, pointed out that young Nigerians are often the largest group of investors in these schemes, attracted by the promise of quick returns. 'I wonder how this monumental fraud happened under the watch of the CBN. We will summon the CBN to explain what regulations were in place to prevent such scams. Beyond Ponzi schemes, there are many other online platforms defrauding Nigerians. Are we saying Nigeria is so porous that we lose trillions of naira just like that?' he queried. Senator Abdul Ningi (Bauchi Central) described the motion as 'extraordinary,' requiring equally extraordinary action. 'We have laws, but Ponzi schemes keep evolving. Who are the people behind them, and why have there been no arrests?' Ningi asked. He also shared personal stories of constituents who invested their meager stipends—N5,000, N10,000, and N20,000—into Ponzi schemes, only to lose everything. Before the debate concluded, Senate President Akpabio recalled the infamous Umanah Umanah scheme in Port Harcourt during the 1990s, which promised quick returns and collapsed after people were encouraged to continuously deposit more money. 'It was a terrible nightmare. Many people lost their savings,' he recalled. He directed that the Senate's investigation must include zonal public hearings where necessary and be thorough enough to bring all Ponzi scheme operators to justice. Akpabio also recommended a nationwide public awareness campaign—including road walks and other activities—to educate vulnerable Nigerians about the risks of investing in fraudulent schemes.
IOL News
04-07-2025
- Business
- IOL News
CBEX Crypto Scam: Africa's AI-Hyped Ponzi Nightmare and the Urgent Call for Real Regulation
Logos of different cryptocurrencies are displayed during the Token2049 conference in Dubai. Beneath the glittering promises of the cryptocurrency world, where AI hype shines brightest, lies a sinister truth: CryptoBridge Exchange (CBEX). This AI-powered Ponzi scheme has shattered and embittered countless African investors. Edwin, a Kenyan government worker, is just one of many victims, having lost $16,000—borrowed money, shattered dreams, and bruised dignity. His isolated story is a symptom of a broader crisis: a digital swindle spreading unchecked across Africa's vulnerable investment landscape. CBEX initially presented an enticing opportunity: an AI trading system guaranteeing monthly returns and attractive referral bonuses. Its appearance of legitimacy was crafted through a complex network of corporate identities and fraudulent certificates. The platform employed "brandjacking," using the acronym of China's Beijing Equity Exchange, a deceptive tactic designed to instill a false sense of security in investors. The unfortunate reality is that these schemes exploit both the lack of technological awareness and the financial aspirations of ordinary Africans seeking to improve their economic standing. The Anatomy of a Modern Ponzi Scheme Africa is no stranger to Ponzi schemes, but CBEX marks a disturbing new phase: the combination of cryptocurrency's lack of transparency with the enticing appeal of artificial intelligence. Crypto scams globally siphoned off an estimated $9.9 billion last year alone, according to blockchain analysis firm Chainalysis—a staggering sum that underscores the profitability and prevalence of these fraudulent activities. CBEX operated a sophisticated, yet classic, Ponzi scheme. Investors observed fabricated "growth" in their accounts, while their actual investments were covertly drained. These funds were funneled through intricate TRON blockchain transactions, distributed across numerous wallets, and converted into various cryptocurrencies to obscure their origin. This digital illusion led investors to believe their capital was expanding, even as it was silently pilfered. Such schemes flourish where financial regulation is lax and populations are financially desperate. CBEX exploited these vulnerabilities in Kenya and Nigeria, its primary operational hubs. Large segments of the populations in these countries are financially underserved, lack financial literacy, and are keen for alternative income. CBEX capitalized on these gaps by inundating messaging apps like Telegram with alluring, yet ultimately unrealistic, promises. Why Africa? Why Now? With a burgeoning youth population, over 60% of whom are under 25 according to a 2023 African Development Bank report, Africa is seeing its young people increasingly embrace cryptocurrency. This adoption is driven by the desire for economic opportunity amidst limited formal employment and unstable local currencies, reflecting a growing demand for digital financial solutions. The rapid adoption of cryptocurrency in Africa has unfortunately outpaced the implementation of adequate safeguards, leading to a precarious situation. Instead of proactive measures, governments have largely reacted after the fact. For instance, Kenya's Capital Markets Authority only issued investor alerts once significant harm had already occurred, and Nigeria's EFCC has been compelled to reactively pursue scammers and recover funds. These isolated responses are insufficient for a crisis that urgently requires a holistic and forward-looking regulatory framework. CBEX's acquisition of an anti-money laundering certificate—even if only for consultancy services—highlights a concerning blend of scammer ingenuity and institutional oversight. This loophole in governmental and institutional diligence emboldens fraudsters, who expertly exploit bureaucratic gaps and insufficient cross-border regulatory collaboration. What Must Be Done? The Imperative for Stronger Regulation and Education African governments need to abandon their current reactive and fragmented regulatory approach. While Nigeria's new Investments and Securities Act, which criminalises Ponzi schemes, is a welcome development, robust and immediate enforcement, coupled with enhanced cross-border collaboration, is crucial. Warnings and investor alerts from regulators are no longer sufficient. There's a pressing need for dedicated crypto regulatory bodies. These bodies must be equipped to comprehend and supervise digital asset markets, with the authority to vet platforms, enforce transparency, and implement stringent Know-Your-Customer (KYC) protocols. Public education on crypto risks is crucial and should be integrated into financial literacy initiatives. Many are drawn to the allure of "guaranteed returns" from AI-powered trading bots, often unaware of the volatile and speculative nature of digital assets. Governments, NGOs, and community organizations should collaborate to provide clear and accessible information on identifying scams. Telegram and other similar technology platforms need to enhance their scam-detection systems. While Telegram has started to ban problematic users and identify scam groups, CBEX's ongoing activity on the platform underscores the critical need for more proactive surveillance and collaboration with law enforcement. Closing Thoughts: Never Again For victims such as Edwin and Abby, "never again" is more than a personal promise; it's a demand for systemic change. While the CBEX scandal may account for billions lost worldwide and millions domestically, the real price is the erosion of hope and the shattering of trust. This cannot be Africa's crypto epitaph. Rather, it must be the point at which we declare an end to hollow pledges and AI fantasies. The urgent need for responsible regulation, investor education, and institutional responsibility is upon us—before another CBEX rises from the depths, poised to exploit aspirations once more. By Sesona Mdlokovana UAE & African Specialist Associate at the BRICS+ Consulting Group ** MORE ARTICLES ON OUR WEBSITE ** Follow @brics_daily on X/Twitter & @brics_daily on Instagram for daily BRICS+ updates
Zawya
03-07-2025
- Business
- Zawya
Nigeria: Alleged $1bln fraud, Court rejects CBEX operators' bail
A Federal High Court sitting in Abuja and presided over by Justice Emeka Nwite has rejected the bail application filed by three promoters of Crypto Bridge Exchange (CBEX) in the alleged $1 billion fraud. Justice Nwite, in a ruling on Monday, June 30, 2025, held that available evidence against the defendants was strong. The defendants are; Adefowora Abiodun Olanipekun, Avwerosuo Otorudo and Chukwuemeka Ehirim. According to the judge, no formal charge was filed against the defendants before they applied for bail. A formal charge was only filed against them before the hearing of their bail application and the charge was waiting for assignment to a judge. Ruling on the bail application, Justice Nwite held that, 'In view of the foregoing and taking cognisance of the nature of the case and particularly, a charge has been filed against applicants, I am of the view and I so hold that interest of justice will be met by taking this application to the court where the charge is pending for the court to take the arraignment of the applicants and hearing the bail application simultaneously. Hence, the application is refused'. Justice Nwite, had on 24 April, 2025, gave the EFCC the go-ahead to arrest and detain six operators of CBEX over their involvement in the fraud. The six suspects include Adefowora Abiodun, Adefowora Oluwanisola, Emmanuel Uko, and Seyi Oloyede, Avwerosuo Otorudo and Chukwuebuka Ehirim. He gave the order after the EFCC's counsel, Fadila Yusuf moved an ex-parte motion to the effect that their detention would be pending the conclusion of investigation of the alleged offences and possible prosecution. Several arguments were canvassed on the bail applications of the defendants. All the defence counsel in the matter sought an order varying the court's earlier order made on 24 April, which granted the EFCC leave to arrest and detain the applicants. They urged the court to vary the earlier order granting bail pending the conclusion of the investigations and possible arraignment and trial. After the arguments of the defence lawyers, the prosecution counsel vehemently opposed their bail request. She told the court that their application had been overtaken by event as a charge had already been filed against them. The lawyer argued that all the defendants in the matter are being charged for offence of obtaining over N1 billion dollars, more than some states' budgets in Nigeria. 'It is in fact more than a budget of about 10 states joined together my lord,' she said. She said the commission was still receiving petitions from victims of the alleged fraud. The lawyer said though granting bail is at the discretion of the court, this should be done judiciously and judicially, urging the court to dismiss same. In the ruling on Monday, Justice Nwite also dismissed the defence arguement that Abiodun, who is the 1st defendant, is indisposed and hence needed a medical attention. The judge held that the defence had not shown in their affidavit evidence that the EFCC cannot take the defendants to a hospital for the specialist attention.
The Star
02-07-2025
- Business
- The Star
CBEX crypto scam: AI-hyped Ponzi scheme defrauds African investors
NAIROBI: Embarrassed and in debt, Edwin was left reeling after losing US$16,000 (RM 67,464) to CryptoBridge Exchange (CBEX), one of the crypto-trading platforms preying on investors in Africa. Edwin, a Kenyan government worker who only gave his first name out of shame, first encountered CBEX on Telegram, a messaging app. He was lured with promises of guaranteed monthly returns made possible by AI-powered trading systems, with lucrative referral bonuses – classic hallmarks of Ponzi schemes. "I had very big plans. But I was conned both by the platform and an agent who lied he could help recover my money," Edwin told AFP. When he began investing last August, there were initial returns, leading him to invest more despite lacking prior cryptocurrency trading experience. In total, he believes he lost roughly 2.1 million shillings (US$16,000), mostly from a bank loan he is now worried about needing to repay. Blockchain analysis firm Chainalysis says some US$9.9bil (RM42bil) was lost to crypto scams globally last year. Such scams are not new in Africa, but their scale and sophistication has grown as cryptocurrency spreads. CBEX collapsed in April, leaving scores of investors like Edwin ruined, mainly in Kenya and Nigeria, according to media reports. But AFP has confirmed from accessing messages on CBEX's private Telegram groups that it has since rebooted its operations despite ongoing investigations and warnings by authorities. 'I'm broke' Abby, another Kenyan investor, carries the guilt of introducing 25 family and friends to CBEX. "(They) invested so much, and it all disappeared," he told AFP. "I would really love to help them recover but I'm broke." In Nigeria, news of CBEX's collapse led to attacks on CBEX-affiliated offices, which have since closed. Adeoye, a Nigerian victim, lost N700,000 (about US$450/RM1,897). "The offer was juicy," he said. "I knew it was a risk, but I thought I would be lucky to cash out before anything happened." CBEX used the "brandjacking" tactic, adopting an acronym similar to the China Beijing Equity Exchange to give it legitimacy. The platform claimed to be licensed in the US and said ST Technologies International was responsible for the AI trading signals, allowing it to operate in Nigeria under the corporate identity of ST Technologies International Ltd (Smart Treasure/Super Technology). It even obtained an anti-money laundering certificate from Nigeria's Economic and Financial Crimes Commission (EFCC) this January, though the EFCC has clarified that this was only for "consultancy services", not for currency exchanges. 'Build trust' To add further legitimacy, CBEX claimed it was established a decade ago and the ST team eight years ago. In reality, it began operations in Nigeria last July, according to local media, before spreading to Kenya. "If you check CBEX wallet addresses on-chain, they were only operating for about a year before the collapse," Kenyan cryptocurrency investigator Wycklife Sewe told AFP. While pretending to actively trade, CBEX actually moved funds out of investors' wallets via TRON (a decentralised blockchain network), said Sewe. The assets then underwent complex routing through multiple wallets and cryptocurrency conversions to obscure the audit trail. "They have designed their system using code to fool you that your money is still there and you can see it growing. But your money is moved immediately after you deposit," Sewe said, adding that CBEX was also running other scams. CBEX has changed its website domain several times to avoid attracting attention. AFP found at least four registered by it. International warnings In April 2024, the Hong Kong Securities and Futures Commission, an independent market regulator, issued a public alert against "CBEX Group". A recent investigation by crypto analyst Specter linked CBEX's withdrawal wallets to darknet marketplace Huione Guarantee, a Cambodia-based platform known for providing illicit tools to facilitate crypto crime. The US Treasury's Financial Crimes Enforcement Network (FinCEN) designated Huione Group a "primary money-laundering concern" in May, saying that it had facilitated more than US$4bil (RM17bil) in illegal transactions between August 2021 and January 2025. Following CBEX's collapse, Kenya's Capital Markets Authority issued an "Investor Alert" about unregulated platforms, and parliament is discussing a bill to regulate virtual assets. 'Never again' Nigeria's EFCC says it has arrested two people and put out warrants for eight others in Nigeria and Kenya. A new Investments and Securities Act expressly prohibits and criminalises Ponzi schemes. But investigations are lengthy and expensive. In May, the EFCC said a "reasonable sum" of lost funds had been recovered, without stating the amount, highlighting the complexity of converting cryptocurrencies back to national currency. A Telegram spokesman told AFP that "scam content is removed when discovered and offending users banned". AFP found some CBEX Telegram groups were now labelled as scams on the platform. On June 10, CBEX, which had previously blamed hackers for the missing funds, claimed on its Telegram channels to have "compensated" the lost money. But it asked affected users to complete "verification" by paying a fee – a common re-scamming tactic. For victims like Abby, the way forward is easy. "Never, ever again! I am done," he said. – AFP
eNCA
01-07-2025
- Business
- eNCA
CBEX crypto scam - AI-hyped Ponzi scheme defrauds African investors
NAIROBI - Embarrassed and in debt, Edwin was left reeling after losing $16,000 to CryptoBridge Exchange (CBEX), one of the crypto-trading platforms preying on investors in Africa. Edwin, a Kenyan government worker who only gave his first name out of shame, first encountered CBEX on Telegram, a messaging app. He was lured with promises of guaranteed monthly returns made possible by AI-powered trading systems, with lucrative referral bonuses -- classic hallmarks of Ponzi schemes. "I had very big plans. But I was conned both by the platform and an agent who lied he could help recover my money," Edwin told AFP. When he began investing last August, there were initial returns, leading him to invest more despite lacking prior cryptocurrency trading experience. In total, he believes he lost roughly 2.1 million shillings ($16,000), mostly from a bank loan he is now worried about needing to repay. Blockchain analysis firm Chainalysis says some $9.9 billion was lost to crypto scams globally last year. Such scams are not new in Africa, but their scale and sophistication has grown as cryptocurrency spreads. CBEX collapsed in April, leaving scores of investors like Edwin ruined, mainly in Kenya and Nigeria, according to media reports. But AFP has confirmed from accessing messages on CBEX's private Telegram groups that it has since rebooted its operations despite ongoing investigations and warnings by authorities. - 'I'm broke' - Abby, another Kenyan investor, carries the guilt of introducing 25 family and friends to CBEX. "(They) invested so much, and it all disappeared," he told AFP. "I would really love to help them recover but I'm broke." In Nigeria, news of CBEX's collapse led to attacks on CBEX-affiliated offices, which have since closed. Adeoye, a Nigerian victim, lost N700,000 (about $450). "The offer was juicy," he said. "I knew it was a risk, but I thought I would be lucky to cash out before anything happened." CBEX used the "brandjacking" tactic, adopting an acronym similar to the China Beijing Equity Exchange to give it legitimacy. The platform claimed to be licensed in the US and said ST Technologies International was responsible for the AI trading signals, allowing it to operate in Nigeria under the corporate identity of ST Technologies International Ltd (Smart Treasure/Super Technology). It even obtained an anti-money laundering certificate from Nigeria's Economic and Financial Crimes Commission (EFCC) this January, though the EFCC has clarified that this was only for "consultancy services", not for currency exchanges. - 'Build trust' - To add further legitimacy, CBEX claimed it was established a decade ago and the ST team eight years ago. In reality, it began operations in Nigeria last July, according to local media, before spreading to Kenya. "If you check CBEX wallet addresses on-chain, they were only operating for about a year before the collapse," Kenyan cryptocurrency investigator Wycklife Sewe told AFP. While pretending to actively trade, CBEX actually moved funds out of investors' wallets via TRON (a decentralised blockchain network), said Sewe. The assets then underwent complex routing through multiple wallets and cryptocurrency conversions to obscure the audit trail. "They have designed their system using code to fool you that your money is still there and you can see it growing. But your money is moved immediately after you deposit," Sewe said, adding that CBEX was also running other scams. CBEX has changed its website domain several times to avoid attracting attention. AFP found at least four registered by it. - International warnings - In April 2024, the Hong Kong Securities and Futures Commission, an independent market regulator, issued a public alert against "CBEX Group". A recent investigation by crypto analyst Specter linked CBEX's withdrawal wallets to darknet marketplace Huione Guarantee, a Cambodia-based platform known for providing illicit tools to facilitate crypto crime. The US Treasury's Financial Crimes Enforcement Network (FinCEN) designated Huione Group a "primary money-laundering concern" in May, saying that it had facilitated more than $4 billion in illegal transactions between August 2021 and January 2025. Following CBEX's collapse, Kenya's Capital Markets Authority issued an "Investor Alert" about unregulated platforms, and parliament is discussing a bill to regulate virtual assets. - 'Never again' - Nigeria's EFCC says it has arrested two people and put out warrants for eight others in Nigeria and Kenya. A new Investments and Securities Act expressly prohibits and criminalises Ponzi schemes. But investigations are lengthy and expensive. In May, the EFCC said a "reasonable sum" of lost funds had been recovered, without stating the amount, highlighting the complexity of converting cryptocurrencies back to national currency. A Telegram spokesman told AFP that "scam content is removed when discovered and offending users banned". AFP found some CBEX Telegram groups were now labelled as scams on the platform. On June 10, CBEX, which had previously blamed hackers for the missing funds, claimed on its Telegram channels to have "compensated" the lost money. But it asked affected users to complete "verification" by paying a fee -- a common re-scamming tactic. For victims like Abby, the way forward is easy. "Never, ever again! I am done," he said. by Peris Gachahi with Oluseyi Awojulugbe in Lagos
