The collapse of CBEX, a fast-growing digital Ponzi scheme disguised as an investment platform operating across Africa, has seen investors lose over US$840 million, according to Nigerian media reports.
- •The event marks one of the largest digital financial frauds on the continent, underscoring the growing risks of unregulated investment channels in emerging African markets.
- •CBEX, which marketed itself as a crypto-powered trading platform offering 100% monthly returns, abruptly restricted withdrawals on April 9 before shutting down entirely.
- •CBEX sustained the illusion of profitability by using funds from new investors to pay earlier ones—a basic Ponzi scheme-, and incentivised its users to refer others and offered bonuses and rewards based on the scale of one’s referral network.
In Nigeria, the Economic and Financial Crimes Commission (EFCC) announced a multi-agency investigation in collaboration with INTERPOL, targeting both domestic collaborators and foreign nationals believed to be behind the operation.
The Securities and Exchange Commission (SEC) in Nigeria emphasized that CBEX was never licensed and that its operations are a criminal offense under the Investment and Securities Act, signed into law earlier this year. CBEX associated itself with a legitimate Chinese company that shares the same name but new reports indicate that this was untrue.
In its final communication, the platform instructed users to deposit more funds to regain access to their locked balances — a last maneuver viewed as an attempt to extract additional funds before disappearing.
Across multiple cities in Nigeria, the fallout has been chaotic with protesters storming CBEX offices in Lagos and Ibadan, looting furniture and equipment in a symbolic display of public frustration. Security agencies have since sealed off affected properties to prevent further unrest.
Kenya, too, has been affected, with some investors caught in the web of the fraudulent platform. Some of them who have spoken to the Kenyan media have revealed that their accounts plus those of their friends were emptied over the weekend.
Despite the absence of a physical presence in Kenya, CBEX made significant in-roads through aggressive social media marketing and peer-to-peer endorsements. It has also been revealed that CBEX’s second-highest traffic in Africa was from Kenya. The Capital Markets Authority (CMA) had not responded to enquiries from The Kenyan Wall Street at the time of publication.
Promising unusually high returns with minimal risk, the CBEX platform attracted tens of thousands of users, many of whom invested their savings hoping to garner high rewards. The lack of basic due diligence, combined with economic desperation created a fertile ground for the scam’s expansion.
Both Nigeria and Kenya are under growing pressure to strengthen digital asset oversight while still nurturing innovation in their fintech sectors.
The Kenyan Government is expected to ramp up its efforts in regulating crypto transactions after the Virtual Asset Service Providers’ Bill was tabled in parliament earlier this month. The proposed law will introduce stricter licensing and increase public awareness campaigns to combat the appeal of quick-return schemes.
