CybAfriqué is a space for news and analysis on cyber, data, and information security on the African continent.
Hello, it’s Olatunji and Alameen, and today’s foreword might be long.
If you think the rundown effects of Trump’s tariffs on the global stock market is the worst thing that can happen to your investment. Think again. In Nigeria, people are still in shock (some in understandable denial) after CBEX, a ponzi scheme which fronted as an investment platform promising 100% returns monthly pulled the rug on its “investors.” As it often is, It is funny, but also deeply pitiable.
The constant difference between people panicking over Trump-tariff-driven 10% market volatility and those who are shattered at losing 100% of their investment to a ponzi scheme is usually socioeconomic class. The less you have, the less you know, and the more you’re incentivized to invest in get-rich-quick schemes. Which is why a system, led by educated, privileged people, owes a responsibility to protect its structurally marginalized. There’s been a lot about what happened with CBEX and how its victims are at fault, but we wanted to 1, point the camera the other way and 2, talk about the systemic enablers of these scams.
Dig in!
HIGHLIGHTS
Authorities are not doing enough against ponzi schemes
If you don’t know what CBEX is by now, it means you are not Nigerian, skipped our foreword, and have been living under a rock. CBEX is a ponzi scheme which fronted as an investment platform with physical offices in Ibadan, Southwest Nigeria. Earlier this week, the ponzi bubble crashed, wiping out what has been estimated to be roughly N1.3 trillion ($808.6 million). For context, that is more than half of the 2.48 trillion naira ($1.49 billion) the Nigerian government is allocating to healthcare for the year 2025.
You can read into the specifics of CBEX here, here, and here. This newsletter is about the enablers of schemes like CBEX.
CBEX began operations in Nigeria in late 2024 and presented itself as a crypto investment platform that only accepted investments in USD. Nigerians are not new to ponzi schemes, but every ponzi scheme needs its own grey area and these two allusions provided the perfect cover for CBEX. In Nigeria, crypto has always been in regulatory limbo—the Central Bank (CBN) hated, and probably still hates it, but the SEC wants to regulate it. Until now, Nigeria does not have a clear-cut response to crypto. It is not outrightly banned, but it’s not accepted either. All of this shrouds the sector in a cloak and more importantly, makes it nobody’s problem. Anyone looking to start a ponzi scheme can easily claim the sector because no regulator is in charge here.
This is somewhat a global problem. In the U.S, the SEC polices crypto platforms as part of its broader responsibility as a market regulator. In Nigeria and across most African countries, SECs mostly serve a licensing role. The little crypto regulation has been mostly pushed by central banks looking to maintain their currency value.
Lack of regulatory oversight leaves the table of the central bank and the SEC, onto other regulators and enforcement agencies. CBEX reportedly ran ads in radio stations, which loops in the National Broadcast Commission (which everyone usually thinks is dead until it has to ban an anti-government song) and perhaps the country’s commission on consumer protection.
In the aftermath of this, the biggest pointer to how responsible the government feels to protecting people will be how it reacts. How it tries to track down the actors and punish enablers. Unlike during the 2016 MMM ponzi scheme, Nigeria has a much stronger and transparent financial system, all thanks to years of identity centralization, stronger KYCs, and broader investment in tracking and surveillance.
This extends to creating regulations for future purpose. Nigeria’s new Investment and Securities Act (2025) explicitly bans Ponzi schemes and tries to hold promoters accountable, which incentivizes influencers and publishers to verify advertisers like CBEX (check out when U.S. SEC fined Kim Kardashian for promoting a crypto securities platform). Also goes without saying money were transferred to accounts with KYC. Fake investment platforms were programmed on likely subpoenable servers and someone rented a whole office to house the platform on.
In Nigeria alone, Ponzi schemes have defrauded victims of over $1 billion (₦500 billion) in the past decade. Some notorious cases include MMM in 2016, which led to over N18 billion in losses, BTCM in Kenya, and BJI Trust in South Africa,
Historically, African governments have done little to track down Ponzi operators or recover stolen funds, often because of an assumed responsibility to the victims and the fact that these victims are also not socio politically powerful or relevant enough to compel action in an ordinarily lax system. Enforcements would probably say “hmm, if you’re stupid enough to invest in a ponzi scheme, then maybe you deserve to be scammed.”
This removes responsibility from authorities and sidelines a much larger socioeconomic problem. Ponzi schemes are a feature, not a bug, of financial systems. Wherever there’s money (or lack thereof), hope, and regulatory gaps, someone will be running a magic show with other people’s cash. And as long as people keep believing in magic, the show will go on.
FEATURES
Access Bank reported ₦1.69 billion in losses from fraud and forgeries, down from ₦6.15 billion the previous year —2024. Techpoint has more.
According to Kaspersky’s survey in South Africa, over half of children aged 11-17 (54%) years old hide their online activities from their parents and other grown-ups.
HEADLINES
Somalia Grants Starlink Operational License, Aiming to Bridge Digital Divide
Nigerian scammer sentenced for defrauding American homebuyer in SA
Nigeria’s SEC Halts New Crypto Licences Amid Extended Due Diligence Measures
Mauritius Moves to Regulate Online Sales, Curb Digital Scams
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