News about the crash of CBEX, the latest Ponzi scheme in town, has rocked social media — particularly X — over the last 24 hours. Many have speculated, with some reports confirming the claim, that the owners of CBEX stopped operating after making away with over N1 trillion of investors’ funds.

Videos on social media capturing angry investors are surfacing across many platforms, with non-investors wondering how Nigerians could invest their hard-earned money into such a platform, given the history of self-inflicted losses Nigerians have endured from schemes like MMM, MBA Forex and Racksterli.

Speaking with a CBEX investor whose money had been reduced to zero on Tuesday, FIJ learnt that the platform did not initially appear to be a Ponzi scheme to many because it capitalised on the promising wave of artificial intelligence (AI) to defraud the unsuspecting public.

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How CBEX Worked

CBEX had been in Nigeria as early as July 2024, although not many people knew about it until a few days before its eventual crash. The platform relied heavily on word of mouth and testimonies from investors to bring in more people. The requirement to introduce new members through referral codes gave it away as a Ponzi scheme, said Adunni, an FIJ source who requested anonymity.

Before Adunni invested her N470,000 with CBEX, two of her friends had repeatedly told her about it. She didn’t join them until one of her friends ‘cashed out’ $1,000 in profit. That got her hooked.

In March, Adunni invested N470,000 with the hope of doubling it to pay her house rent.

She said that after registering on the platform, her friends and other investors made it clear that AI traded on behalf of users and investors didn’t have to do anything. According to her, the AI trader, called “Hosting”, traded twice daily and promised a certain amount of profit. Milli D, a Nairaland user FIJ contacted, confirmed investors made 3 per cent of their investment capital daily.

“I invested N470,000 towards the end of March. I registered through a link someone sent me. Depending on the amount you put in, you’d get daily returns, although the benchmark was $100. If you put in $100, you’d have a certain trading value. The more you invest, the higher the trading value,” Adunni told FIJ.

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Unlike many fake investment platforms, CBEX didn’t promise a fixed monthly return on investment. Adunni said investors could withdraw their profits after 30 days, but the typical withdrawal window was within 45 days.

“But in my case, I wanted to leave it for long because I wanted my money to grow. In the end, I lost everything. By the time the news of the crash went mainstream, I realised CBEX had stopped withdrawals,” said Adunni.

After CBEX stopped investors from withdrawing, they claimed they would roll out profits for the next five days. Adunni said CBEX told investors that this measure was to weed out scammers who had infiltrated the site.

“It was at this point I knew it was a Ponzi and that the site would crash. First, we all started seeing multiple zeros on our portals, which meant our money had vanished. Withdrawals were supposed to resume today, but as of Monday, CBEX was asking investors with less than $1,000 to pay $100 for some kind of KYC verification. It’s another scam,” she explained.

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“They claimed they didn’t crash and that they had explained what they were trying to do, which was to root out scammers from their system — but that’s insincere. They’re basically asking customers to prove that the funds they invested without coercion are theirs. I should have known they were a fraud because we downloaded the app from a website — not from the Play Store or App Store.”

What is CBEX?

CBEX stands for China Beijing Equity Exchange, but it has no affiliation with the legitimate Chinese entity of the same name.

In February 2024, the China Beijing Equity Exchange (CBEX) publicly clarified that it has no connections with an overseas company named CBEX Group, which conducted cryptocurrency-related business.

The exchange emphasised that it had never engaged in any trading activities related to cryptocurrencies or other virtual assets. Furthermore, CBEX owns all rights to the CBEX trademark in China and stated its intent to take action against any organisation or individual illegally using the name

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Government’s Stance

On Monday, Emomotimi Agama, the Director General of the Securities and Exchange Commission (SEC), issued a firm warning to Nigerians over the use of CBEX, stating that any such platform not registered with the Commission is considered illegal.

 “Recently, a particular platform has gained attention online, with numerous posts going viral regarding its activities. Subsequently, there have been reports suggesting its shutdown. I want to make this absolutely clear — if a platform is not registered with the SEC, it is illegal,” Agama said.

For CBEX victim investors like Adunni, the SEC’s statement is too little, too late.