By Kazeem Ugbodaga
The collapse of CBEX, a digital asset trading platform, has left thousands of Nigerians devastated, with reported losses exceeding ₦1.3 trillion. This incident underscores the persistent threat of fraudulent investment schemes in Nigeria and highlights the urgent need for regulatory vigilance and public awareness.
CBEX operated as a digital trading platform, enticing investors with promises of high returns through purported AI-driven trading strategies. However, on April 14, 2025, the platform abruptly ceased operations, locking users out and rendering their digital wallets empty. The platform’s Telegram channels were also shut down, and withdrawal requests were postponed indefinitely.
Cryptocurrency expert Taiwo Owolabi revealed that CBEX had been operating without registration from the Nigerian Securities and Exchange Commission (SEC). He explained that the platform manipulated users by displaying fictitious balances, while actual funds were siphoned off through complex cryptocurrency transactions involving TRX, USDT, and ETH. Owolabi estimated the total stolen funds to be around $847 million, with the figure likely to rise
The SEC had previously warned Nigerians against investing in unregistered trading platforms, emphasizing that operating such platforms without prior registration is an offense under the Investments and Securities Act (ISA) 2025. Despite these warnings, many investors were lured by the promise of high returns, highlighting a gap between regulatory advisories and public compliance
The Economic and Financial Crimes Commission (EFCC) has also cautioned against fraudulent investment schemes, noting that many Nigerians have lost significant sums to Ponzi schemes, forex trading scams, and unregulated cryptocurrency ventures
The collapse of CBEX has had a profound impact on its investors, many of whom invested their life savings. Social media platforms are awash with stories of individuals facing financial ruin, unable to meet basic needs or fulfill obligations. The psychological toll is equally severe, with reports of depression and anxiety among affected individuals.
The CBEX debacle serves as a stark reminder of the risks associated with unregulated investment platforms. It underscores the need for increased public education on financial literacy and the importance of conducting due diligence before investing.
Regulatory bodies must intensify efforts to monitor and shut down fraudulent platforms, while also providing clear guidelines for legitimate investment opportunities. Investors, on their part, should heed warnings from authorities and avoid schemes that promise unrealistic returns.
The CBEX collapse is a cautionary tale of how digital platforms can exploit regulatory gaps and public naivety to perpetrate large-scale fraud. As Nigeria continues to embrace digital financial services, a collaborative effort between regulators, financial institutions, and the public is essential to safeguard against such fraudulent schemes and protect the financial well-being of its citizens.
