- CBEX, a Ponzi scheme that promised 100 per cent return on investment within one month, has crashed
- The platform allegedly transferred over $822 million into an untraceable private Ethereum wallet, which made it difficult for investors to withdraw from their wallets
- With its crashing, CBEX’s investors’ funds have gone down the drain like many other Ponzi schemes before it
The news of the crash of CBEX, an asset trading platform that promised a 100 per cent return on investment (ROI) within one month, has continued to dominate conversations among Nigerians.
The promise of high and consistent ROI piqued the interest of many investors, who thronged the platform with their savings, assets, and borrowed funds.
The platform reportedly crashed on Monday, April 14, following the inability of investors to withdraw from their wallets, with the loss estimated at N1.3 trillion.
CBEX was launched as a digital asset trading platform that purportedly aimed to provide a secure and transparent environment for transactions.
Its Ponzi-styled operational model raised concerns as the platform was reported to have allegedly displayed falsified withdrawal records to undermine the challenges users faced in accessing their funds.
The news of CBEX’s crash elicited debates among social media users. While some lamented their loss, others berated those who fell victim to the scheme.
How CBEX crashed
It was alleged that CBEX transferred over $822 million into an untraceable private Ethereum wallet, which made it difficult for investors to withdraw from their wallets.
Following the crash, CBEX locked its telegram channels and postponed withdrawals while offering investors the chance of paying $200 for $2,000 verification and $100 for $1,000 verification.
During an X space organised by Trending X, a cryptocurrency expert and security analyst, Taiwo Owolabi, analysed how CBEX crashed.
Owolabi said data showed that the money was moved to a TRX address, and about $847 million in USDT has been stolen so far, with the likelihood of an increase.
He explained that the creators designed a weak website to look like ByBit, a legitimate trading platform, through which investors make payments, which are then moved from the TRX account, converted to USDT, and transferred to an Ethereum account.
“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 said.
Investors’ funds gone down the drain
Owolabi further noted that with its rob-Peter-to-pay-Paul operational model typical of Ponzi platforms, CBEX investors should consider their invested funds gone.
The crypto expert said the slim chance of investors getting their funds is if people decide to pay the $200 and $100 verification fees, which would enable some people to be paid, leaving others.
The possibility of recovering investments on the platform is further eroded by the fact that CBEX is not a licenced trading platform and, therefore, not recognised by the Nigerian Securities and Exchange Commission (SEC).
Recall that the SEC warned that 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, under the Investment and Securities Act (ISA) 2025 signed by President Bola Tinubu on March 29.
“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,” the SEC stated.
The Director-General of SEC, Emomotimi Agama, also stated that promoters and operators of Ponzi schemes face at least 10 years imprisonment and operators will pay N40 million penalty, following the signing of the ISA 2025.
Agama stated that until now, the commission had no legal backing to prosecute Ponzi scheme operators, which he said had made it difficult to bring them to justice.
“With the new law, they now face a 10-year jail term and beyond,” he noted.
Inside story of how Chi Nnadi’s crypto exchange Mara crashed with investors’ $23 million
Meanwhile, TheRadar earlier reported that at the height of the crypto boom of 2021, a new crypto exchange called Mara (CoinMara Inc.) was born.
Mara had a simple goal: be a pan-African exchange poised to “build Africa’s crypto economy.” TheRadar reported how Mara crashed with investors’ $23 million.
