Senate launches probe into ₦1.3tn CBEX scam, vows to tackle rampant Ponzi schemes

The Senate has resolved to investigate the activities of Ponzi schemes across the country, following the collapse of the Crypto Bullion Exchange (CBEX), which reportedly defrauded investors of over ₦1.3 trillion.

Lawmakers have described the incident as one of the most devastating financial scams in Nigeria’s history.

The motion, co-sponsored by Senators Adetokunbo Abiru (Lagos East) and Osita Izunaso (Imo West), led to the constitution of a Joint Senate Committee to conduct an investigative hearing, comprising Capital Market, Banking, Insurance and Other Financial Institutions; Anti-Corruption and Financial Crimes; and ICT & Cybercrime.

Senator Abiru, who chairs the Senate committee on banking, Insurance and other Financial Institutions, while presenting the motion during plenary on Wednesday, warned that fraudulent schemes like CBEX are growing more sophisticated, taking advantage of digital tools, poor financial literacy, and weak regulatory enforcement.

Read also: EFCC arraigns two for CBEX investment fraud in Abuja

He said, “The Senate is deeply concerned about 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; MBA Forex in 2020, to mention a few, which have repeatedly defrauded millions of Nigerians, causing severe financial hardship and, in some cases, driving victims to depression, family breakdowns, and even suicide.

“The recent case of Crypto Bullion Exchange (CBEX), a digital investment platform which lured millions of Nigerians with the promise of outrageous returns, before suddenly collapsing and resulting in investors losing over ₦1.3 trillion (about $847 million), making it one of the most devastating financial scams in the country’s history.

“Despite CBEX’s scale and visibility, it operated unchecked by any regulatory agency, the SEC, the CBN, NFIU, or EFCC. This lack of coordinated oversight allowed it to defraud millions of Nigerians,” Abiru said.

CBEX reportedly promised outrageous investment returns and used referral bonuses, celebrity endorsements, and social media hype to lure unsuspecting investors.

The Lagos East senator lamented that the CBEX incident is not an isolated case, but part of an existing and growing pattern of unregulated and fraudulent schemes leveraging technology, and social media to deceive the public, often using tactics such as referral commissions, celebrity endorsements, and fake testimonials to build credibility and drive recruitment;

He added, “Despite the scale of operations and visibility of CBEX, it operated for an extended period without facing sanctions by either the Securities and Exchange Commission (SEC), the Central Bank of Nigeria (CBN), the Nigerian Financial Intelligence Unit (NFIU), or the Economic and Financial Crimes Commission (EFCC)

“The growing sophistication of such fraudulent platforms, combined with high youth unemployment, widespread poverty, low levels of financial literacy, and a lack of access to formal investment opportunities, makes the Nigerian population increasingly vulnerable to such schemes.”

Abiru added, “ Section 88 (1) (a) and (b) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) empowers the National Assembly to conduct investigations into “any matter or thing with respect to which it has power to make laws,” and “the conduct of affairs of any person, authority, ministry or government department charged, or intended to be charged, with the duty of or responsibility for executing or administering laws enacted by the National Assembly”;

Senator Abdul Ningi (Bauchi Central) in his contribution quoted the constitution to justify the Senate’s action.

He said, “Sections 88 and 89 of the Constitution empower us to investigate any authority or person charged with the responsibility of administering laws. But for a very long time, we’ve not effectively utilised these powers, especially in matters like this.”

Read also: SEC warns public against CBEX crypto platform

He described how rural dwellers, including his own constituents, were lured by the promise of fast returns.

“You give them ₦10,000 or ₦20,000 as support, and they take it to a Ponzi scheme that promises them double in one week. This quick-money mindset has made our people easy prey,” he added.

“If this continues, and no action is taken by relevant bodies like the Central Bank of Nigeria Security Exchange Commission, Nigeria Financial Intelligence and the rest, the Parliament will have no choice but to assert its full constitutional authority.”

Senator Tahir Monguno (Borno North) said the schemes have “sent some Nigerians to their early graves” and insisted that loopholes in existing financial laws must be fixed.

Senator Sadiq Umar (Kwara North) noted, “Our job is to protect the people. Citizens trust that the government will watch their backs, but our regulators have failed, and we must hold them accountable.”

Senator Solomon Adeola (Ogun West) raised concerns about the broader fintech space and criticised the lack of digital transaction oversight:

“Ponzi is just one of many digital payment scams. Where is the CBN? Where is the cybersecurity framework? We are being exploited because our regulation is weak.”

Senate President Godswill Akpabio, in his response, recounted a personal experience from the 1991 financial crisis, drawing parallels with the CBEX scandal.

“Back then in 1991, there was this scheme called Umana Umana in Port Harcourt, you put in ₦50,000 and got ₦100,000 in a week.

“When the authorities eventually intervened, the fraudsters had warehouses filled with cash, some already eaten by rats. It was a nightmare, and many Nigerians committed suicide,” he recalled.

He warned that similar tragedies could repeat themselves if action isn’t taken.

Akpabio noted, “Today, we have students using pocket money, parents dipping into medical savings, all investing in Ponzi schemes. When they collapse, Nigerians are left broken, and we see no visible arrests or sanctions.”

Read also: EFCC recovers portion of funds from CBEX Ponzi scheme

Akpabio called for not just an investigation, but a nationwide public education campaign:

“We must educate our people. Let’s organise public hearings across the six geopolitical zones. It’s time to alert our agencies, the CBN, EFCC, NFIU, to their responsibilities under Section 14(b) of the Constitution, which mandates the protection of citizens’ welfare and security.”

The Senate, thereafter, mandated the Joint Committees on Banking, Insurance and Other Financial Institutions (lead), Capital Market, Anti-Corruption and Financial Crimes, ICT and Cybersecurity to conduct a comprehensive investigative hearing, including public sensitisation campaigns, and report back in four weeks.

“This is no longer a routine matter. It’s a national emergency,” Akpabio declared. “If it does not concern you today, it will concern your neighbour tomorrow.”