Senate Probes N1.3 Trillion Ponzi Scheme Collapse
The Nigerian Senate has launched a full-scale investigation into the alarming surge of Ponzi schemes ravaging the country, a crucial move sparked by the devastating collapse of the Crypto Bullion Exchange (CBEX). This scheme alone allegedly swindled Nigerians out of over ₦1.3 trillion, leaving a trail of financial devastation.
During a recent plenary session, lawmakers openly expressed their profound dismay that CBEX, despite its widespread operations and high visibility, managed to function unchecked for an extended period. This glaring oversight has cast a harsh spotlight on significant deficiencies in Nigeria's financial regulatory and enforcement landscape.
To tackle this urgent crisis, the Senate has mandated a joint committee to conduct a thorough public hearing. This committee faces a strict one-month deadline to present its findings, which are expected to illuminate the inner workings of these fraudulent schemes, expose the regulatory gaps that allow them to flourish, and propose robust recommendations to prevent future occurrences.
The Economic and Financial Crimes Commission (EFCC) has been actively pursuing these cases, having already labeled CBEX a Ponzi scheme and announced arrests and fund recoveries linked to the fraud. The EFCC previously warned the public about the operations of 58 other illegal Ponzi scheme operators nationwide, underscoring the pervasive nature of this financial crime.
Experts and key regulatory bodies, including the Securities and Exchange Commission (SEC), have consistently cautioned Nigerians about the perils of Ponzi schemes. They point to factors such as widespread financial illiteracy, lax regulations, economic hardship, and even greed as reasons why many individuals fall prey to these enticing but ultimately deceitful investment opportunities. Notably, under the recently enacted Investments and Securities Act 2025, promoters and operators of Ponzi schemes now face severe penalties, including imprisonment for up to 10 years or a fine of not less than ₦20 million, or both.
The ongoing Senate investigation aims not only to bring those responsible for schemes like CBEX to justice but also to significantly bolster the legal and regulatory frameworks essential for safeguarding Nigerians from future financial frauds.
