Senate launches investigation into rampant ponzi schemes, CBEX scam

The Nigerian Senate has directed its Joint Committees on Capital Market; Banking, Insurance and Other Financial Institutions; Anti-Corruption and Financial Crimes; and ICT & Cybercrime to launch a thorough investigation into the growing operations of Ponzi schemes across the country.

This resolution followed the adoption of a motion titled “Investigative Hearing into the Operations of Ponzi Schemes in Nigeria, with Particular Reference to the Recent Crypto Bullion Exchange (CBEX) Incident”, sponsored by Senator Abiru Adetokunbo (Lagos East) and co-sponsored by Senator Osita Izunaso (Imo West).

The Senate expressed deep concern over the increasing spread of unregulated and fraudulent investment platforms—commonly referred to as Ponzi or pyramid schemes—including notable past examples like MMM Nigeria in 2016 and MBA Forex in 2020, which have defrauded millions of Nigerians, leading to financial ruin, emotional distress, family breakdowns, and in extreme cases, suicide.

In particular, lawmakers cited the recent collapse of Crypto Bullion Exchange (CBEX), a digital investment platform that allegedly defrauded Nigerians of over ₦1.3 trillion (approximately $847 million) after luring investors with promises of unusually high returns. The Senate described the CBEX debacle as one of the most devastating financial scams in the nation’s history.

Senators further noted that CBEX is not an isolated case but part of a growing trend of tech-driven and social media-promoted fraudulent schemes. These platforms often employ tactics like referral bonuses, celebrity endorsements, and fake testimonials to build credibility and attract unsuspecting investors.

Despite CBEX’s massive operations and public visibility, the Senate expressed shock that no significant action was taken against it by key regulatory agencies such as the Securities and Exchange Commission (SEC), the Central Bank of Nigeria (CBN), the Nigerian Financial Intelligence Unit (NFIU), and the Economic and Financial Crimes Commission (EFCC).

During deliberations, Senate Chief Whip, Senator Tahir Monguno (Borno North), emphasized the role of legislators in sensitizing Nigerians to the dangers of such schemes, noting that the failure of regulatory bodies played a major role in the crisis.

Senator Abdul Ningi (Bauchi Central) described the motion as “extraordinary,” adding that despite the existence of laws granting oversight powers to agencies like SEC, CBN, and EFCC, Ponzi schemes continue to flourish unchecked. “These scams have persisted for over two decades under our democratic watch, yet arrests and sanctions are rare,” he lamented.

Senator Solomon Olamilekan (Ogun West), Chairman of the Senate Committee on Appropriations, said Ponzi schemes have harmed the nation’s economy and called for a proper probe that will lead to arrests and punishments that deter future perpetrators.

Senator Adamu Aliero (Kebbi Central) questioned how foreign investors could have confidence in Nigeria’s economy with such fraudulent practices rampant. He acknowledged the gullibility of some victims but stressed that government agencies must do more to detect and stop such operations early.

Clarifying the role of the Senate probe amid ongoing legal proceedings against CBEX, Senator Abiru explained that the National Assembly’s investigation aims to uncover the root causes and propose long-term preventive strategies. “While the government may be handling legal cases, our objective is to understand the failures and put mechanisms in place to stop similar incidents from reoccurring,” he said.

The Senate unanimously endorsed the motion and committed to holding a public investigative hearing to expose those behind Ponzi operations and strengthen regulatory oversight to protect Nigerian citizens from further financial exploitation.