CBEX is a digital trading asset platform that promised investors a 100 per cent return on investment in 30 days.
Its purported goal was to create a secure, transparent environment for transactions.
However, its operational model has recently come under scrutiny as allegations of fraud and deceptive practices emerged.
The platform is said to display falsified withdrawal records to mask the difficulties users encounter when trying to access their funds.
According to the Security and Exchange Commission (SEC), CBEX is a Ponzi scheme.
In accordance with the ISA 2025 recently signed by President Bola Tinubu, it is now an offence for any entity to operate an online forex trading platform or provide related services without prior registration with the commission.
“By virtue of this Act, it is an offence in Nigeria for any entity that is not registered by the commission to carry out the business of online foreign exchange trading platforms or related services.
“Any business entity with the plan of setting up a business in any of these areas is advised to visit the HOD DRM Department of the commission for further direction on how to register with the commission to avoid sanctions,” it added.
The commission noted that “Under the newly enacted legislation, the Securities and Exchange Commission (SEC) is now empowered to regulate a broader scope of market activities as Section 3(3)(b) of the Act explicitly mandates the commission to “register and regulate securities exchanges, commodity exchanges, virtual and digital asset exchanges, and other market venues.”
This is as Nigerians on several social media platforms have begun to count their losses as a digital asset trading platform popularly known as CBEX reportedly swept over N1.3 trillion from their investors’ accounts.
The digital trading platform crashed on Monday after investors could not access the money in their wallets.
CBEX was said to have allegedly locked its telegram channels and postponed its withdrawals while giving investors the lifeline of $2,000 for $200 verification and $1,000 for $100 verification.
Analysing the crash on X space organised by Trending X, a cryptocurrency expert and security analyst, Taiwo Owolabi said data has shown that the money was allegedly moved to a TRX address (yourself:TDqSquXBgUCLYvYC4XZgrprLK589dkhSCf), and the total volume stolen so far in USDT is $847 million and likely to increase.
According to Owolabi, the invested funds could not be accessed because CBEX is not a licensed platform.
He explained that the creators designed a weak website to look like ByBit, which is a legitimate trading platform.
“They designed the weak website to convince people in the future that it was a security breach that affected them. Apparently, when you make payments, you pay them into a TRX account, and then, immediately, they move it from that TRX wallet, gather it, convert it to USDT, then to ETH. So, when you are logging into your account, there is literally no money on your profile.
“What you see are just numbers. All the daily activities you do to ‘trade’ increase your money. All the AI trading is fake. When it’s time for withdrawal, they will send you another person’s money.
“Since, you won’t be leaving them because of greed. You will most likely put the money back and even more. So, they will use that same money to pay another person. As you spread the word for them, more people will join and do the same.”
Owolabi, while explaining on the X space, said that in reality, all the funds are gone. Unless people decide to pay the $100 and $200 verification fees, that way, they will settle some people and leave others to languish.
He also maintained that it was the same way popular Ponzi schemes that have duped Nigerians in the past behaved, adding, “It is a rob Peter to pay Paul’ deal.
While warning participants of ponzi schemes, SEC noted that “Under the newly enacted legislation, the Securities and Exchange Commission (SEC) is now empowered to regulate a broader scope of market activities as Section 3(3)(b) of the Act explicitly mandates the commission to “register and regulate securities exchanges, commodity exchanges, virtual and digital asset exchanges, and other market venues.”
The director general of the commission, Dr Emomotimi Agama, described the new law as “a landmark step in positioning Nigeria’s capital market to be more inclusive, robust, and in tune with global best practices.”
He stated, “The ISA 2025 has given the commission the legal backing to provide clarity, ensure investor protection, and enhance market confidence, especially in new and previously unregulated segments such as digital asset exchanges and online foreign exchange platforms.”
