CBEX: Timi Agbaje explains what the law says about ponzi schemes, influencer liability

• CBEX crashes with N1.3 trillion in investor funds, leaving investors devastated
• The platform used fake dashboards and AI trading simulations to deceive users and circulate money among investors
• A legal influencer on X, Timi Agbaje, explains the legal consequences of Ponzi schemes

The crash of CBEX, a crypto trading platform that promised an outrageous 100% return on investment within one month, has once again brought to the forefront the dangerous allure of Ponzi schemes in Nigeria. 

With N1.3 trillion lost and over $822 million allegedly moved into untraceable private Ethereum wallets, many investors are left devastated, searching for answers, accountability, and justice.

In the wake of this financial disaster, social commentator and legal analyst Timi Agbaje took to social media to break down the legal implications of the CBEX saga. 

His X post quickly went viral, not only because it hit hard on the culture of get-rich-quick schemes but because it dissected what the new Investment and Securities Act (ISA) 2025 actually says about such scams.

Registration is mandatory

Agbaje highlighted Section 61(1) of the ISA 2025, which mandates that any person or entity carrying out investment business in Nigeria must first register with the Securities and Exchange Commission (SEC). 

CBEX, which operated without any such license or approval, was in clear violation of this provision.

This lack of registration is not a small oversight, it’s a criminal offence. 

And with the new ISA in effect, the consequences are no longer light.

Minimum five-year jail term for operators

According to Section 344(E) of the Act, anyone operating an illegal investment platform, especially one that defrauds people, faces a minimum of five years imprisonment and/or a N5 million fine, excluding additional penalties. 

In cases where promoters or operators intentionally deceive the public, the punishment could escalate significantly, especially with the new clause allowing up to 10 years imprisonment and a N40 million fine, as stated by SEC Director-General Emomotimi Agama.

CBEX’s operational model, robbing Peter to pay Paul, was the textbook definition of a Ponzi scheme. 

The platform used fake dashboards, falsified trading records, and a cloned website to mimic legitimacy. But behind the digital facade, there were no real assets being traded. 

According to cryptocurrency analyst Taiwo Owolabi, investors’ funds were immediately moved from TRX wallets to USDT, and then to Ethereum, vanishing into the blockchain ether.

Influencers, bloggers, promoters are not safe either

One of the most groundbreaking takeaways from Agbaje’s post is his warning to social media influencers, bloggers, and promoters who advertise investment platforms without verifying their legitimacy.

Under the new law:

• If you promote a scheme without written consent from the SEC,
• And your advert includes untrue or misleading information,
• And people lose money because of it,

You are liable, and not just morally, legally.

Within one month of the crash, you, along with the platform's directors and promoters, must refund and compensate affected investors, unless you can prove that:

1. You had no knowledge of the platform’s fraudulent nature.

2. The promoters misled you without your consent.

This provision drastically shifts the influencer landscape. 

The days of promoting questionable "investments" for quick cash without consequences are over.

Culture of desperation meets legal crackdown

Agbaje didn’t mince words when he said, “Many of you have dedicated your life to escaping poverty through shortcuts.” 

His statement speaks to the desperation driving many Nigerians to fall for schemes like CBEX. 

But as the law evolves, so must the public’s mindset. 

The promise of easy wealth now comes with serious legal risks, not just for the creators of these schemes, but also for those who amplify them.

SEC plans tougher actions against Ponzi schemes in 2025, commits to enhancing investor confidence

Meanwhile, TheRadar earlier reported that the Securities and Exchange Commission (SEC) vowed to intensify its efforts to eliminate Ponzi and pyramid schemes in 2025, creating a more secure environment for legitimate investment opportunities to flourish.

SEC Director-General Dr. Emomotimi Agama, in his New Year address to the capital market community on Sunday, January 5, emphasised that protecting investors remains central to the commission's mission.