CBEX, a cryptocurrency exchange, collapsed, leading to outrage among users after their funds were locked following a withdrawal suspension. Videos of distressed traders went viral, highlighting severe financial losses. The Nigerian SEC raised concerns about unregulated platforms, hinting at legal actions. CBEX had faced suspicion previously from financial authorities due to alleged fraudulent activities and misleading claims. The platform’s promise of 100% returns drew in investors, but parallels to notorious Ponzi schemes have surfaced.
The recent collapse of CBEX, a cryptocurrency exchange, has caused significant outrage among users following allegations of a Ponzi scheme. Hundreds of Nigerian investors have reported losing their account balances, which fell to zero after the exchange suspended all withdrawals, citing a supposed “security breach”. The exchange initially promised users a full return on damages by April 15, but many were left devastated as their investments disappeared overnight.
Social media videos showcased the distress faced by affected traders, including one individual who claimed to have lost 8.7 million naira, roughly $5,432. Users expressed their frustrations as CBEX closed communication channels, such as Telegram groups, leading to further anxiety among investors. Following the unrest, an angry group of traders looted the CBEX office in Ibadan, taking various office items as frustration boiled over.
The Nigerian Securities and Exchange Commission (SEC) responded, urging citizens to be wary of the risks posed by unregulated digital investment platforms that may engage in Ponzi schemes. While not directly naming CBEX, SEC Director Emomotimi Agama highlighted the illegal operations of unregistered platforms and the SEC’s authority to investigate and shut these down.
This incident marks a continuation of issues flagged against CBEX, which had previously been labelled as suspicious by the Hong Kong Securities and Futures Commission (SFC) in April 2024. Complaints from local investors about withdrawal difficulties prompted this scrutiny. The SFC indicated that CBEX had misled investors with false withdrawal records while claiming to possess the necessary licenses, which it reportedly did not.
CBEX marketed itself as an AI-driven cryptocurrency trading platform, promising 100% returns within a month of depositing funds. This enticing offer attracted numerous users who believed they could double their investments quickly. Their operations, notably the acceptance of U.S. dollar deposits and a visually appealing interface mimicking established exchanges, contributed to their perceived legitimacy.
As early as February 2025, concerns arose among users on forums, comparing CBEX’s structure to historical Ponzi schemes like MMM. By April, the scrutiny intensified, paired with the suspension of withdrawals, resulting in heightened panic among traders when their funds became inaccessible.
