CBEX not registered with SEC – DG

• Emomotimi Agama, the Director-General of the Securities and Exchange Commission, said the CBEX digital trading platform is not registered with the agency
• He said the SEC has not received any official complaints concerning CBEX and would swing into action once it does
• Agama said the SEC will continue educating Nigerians about Ponzi schemes as it has been doing so through paid advertisements, videos uploaded on the SEC website, interviews, and newspaper articles

The Director-General of the Securities and Exchange Commission (SEC), Emomotimi Agama, says the CBEX digital trading platform is not registered with the agency.

Agama stated this on Arise Xchange on Wednesday, April 16, in response to questions on the loss of investors’ funds after the recent crash of the CBEX trading platform, which promised investors a 100 per cent return on investment in one month.

He said the commission has often warned that any unregistered investment scheme is illegal, adding that investors must always check if schemes are registered with the SEC before investing.

Agama noted that the Investment and Securities Act (ISA) 2025, signed by President Bola Tinubu on March 29, defines Ponzi schemes and notes 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.

“For us at the SEC, our primary responsibility is investor protection, and investor protection stems out of registration and regulation.

“When a scheme is not registered with the SEC, it becomes illegal, and it is important that whoever is interested in investing in such schemes must ask the question, Are you registered with the SEC?

“If that is not the case, then it is automatically stated and known that such is an illegal activity and will not be condoned even by the SEC,” he said.

‘SEC will act if it receives official complaints concerning CBEX’

The SEC DG further stated that the commission was unaware of CBEX’s illegal operation, stating that it had yet to receive any official complaints regarding the scheme.

He added that once official complaints are received, the commission will swing into action to bring the scheme’s operators to book in line with the ISA 2025.

Agama previously stated that promoters and operators of Ponzi schemes face at least 10 years imprisonment and operators will pay a N40 million penalty, following the signing of the ISA 2025.

The SEC DG 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.

“Oftentimes with schemes like this, most people will always try to keep it away from the regulator and even keep it away from their friends, except a few groups of persons whom they are interested in.

“So, for us, at the SEC as we speak today, at this hour, we have not received any complaints from anyone regarding CBEX.

“If we had received any formal complaint regarding CBEX, the team at the SEC will have actually swung into action trying to get who is involved.

“However, we sympathise very much with the people, the victims, because they are Nigerians, and of course, at SEC, we will commence investigation as to where these people are, and make sure we hunt them down, because the law actually has given us the power to take them down, find them, sanction them by fining, and also sending them to the prisons for 10 years; that is the provision of the law.”

SEC will continue educating Nigerians about Ponzi schemes

Agama also stated that it has often warned Nigerians against investing in schemes with a Ponzi-style operational model, which offer mouth-watering returns.

The SEC DG reeled off some of the media through which it educates the public about unregistered entities to include paid advertisements, videos uploaded on the SEC website, interviews, and newspaper articles.

“Ponzi scheme didn’t start today; it is a global malaise. It started in the 20th century by a man called Charles Ponzi, who clearly, at that point in time, promised that he was going to give every investor 50 percent in returns, and from then on, it became a practice by so many people to defraud people of their hard-earned resources.

“It is very clear that the choices made by people must be dictated and regulated by the law of the land.

“The SEC will continuously educate people. We have in the process of doing that, agreed to various forms of interview.

“We’ve also launched a podcast at the SEC, providing more information towards our long-term goal of launching a capital market radio. We will continue, because we know that it is not enough.

“We will continue to educate Nigerians on the last milestone to make people understand and know the value of proper investment.”

CBEX’s crash sparked public outcry, tears

The first hint of a potential crash of CBEX started last weekend when many investors could not withdraw their funds.

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.

CBEX, an asset trading platform that promised a 100 per cent return on investment (ROI) within one month, eventually crashed on Monday, April 14, eliciting debates among social media users. While some lamented their loss, others berated those who fell victim to the scheme.

This is even as the Economic and Financial Crimes Commission (EFCC) has assured that individuals who invested in the CBEX digital trading platform will get their money back.

The commission’s spokesperson, Dele Oyewale, noted that the agency is already working with Interpol and other international agencies to ensure the operators of CBEX are brought to book.

How CBEX Crashed: The Ponzi scheme that cost Nigerians N1.3 trillion

Meanwhile, TheRadar earlier reported that the news of the crash of CBEX, an asset trading platform that promised a 100 per cent return on investment (ROI) within one month, continued to dominate conversations among Nigerians.

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.