Senate Launches Investigation into ₦1.3tn CBEX Ponzi Scam, Vows Nationwide Crackdown on Digital Fraud

The Senate is probing the ₦1.3 trillion CBEX fraud as Ponzi schemes ravage Nigerian investors.

Lawmakers blame lax regulation and vow reforms to protect citizens from future digital scams.

The Nigerian Senate has launched a comprehensive investigation into the alarming rise of Ponzi schemes in the country following the collapse of the Crypto Bullion Exchange (CBEX), which allegedly defrauded investors of over ₦1.3 trillion (approximately $847 million).

The Senate, during plenary on Wednesday, described the CBEX debacle as one of the most devastating financial scams in Nigeria’s history and resolved to take sweeping action to prevent similar fraudulent operations from flourishing unchecked.

A motion co-sponsored by Senators Adetokunbo Abiru (Lagos East) and Osita Izunaso (Imo West) led to the formation of a Joint Senate Committee to conduct an investigative hearing. The committee comprises the Senate Committees on:

• Banking, Insurance, and Other Financial Institutions (lead)
• Capital Market
• Anti-Corruption and Financial Crimes
• ICT and Cybersecurity

Senator Abiru, who chairs the Banking Committee, delivered a sobering presentation during the plenary session. He expressed deep concern over the growing sophistication of digital Ponzi schemes, particularly CBEX, which leveraged social media, referral incentives, and celebrity endorsements to lure millions of unsuspecting Nigerians.

Despite CBEX scale and visibility, it operated unchecked by any regulatory agency, the SEC, the CBN, the EFCC, or the NFIU. This lack of oversight enabled the platform to deceive the public on a massive scale,” Abiru said.

The CBEX platform reportedly promised investors outrageous returns, encouraging participation through referral bonuses and online hype. The scheme’s collapse has left countless Nigerians, ranging from students and low-income earners to retirees and small business owners, devastated.

Abiru said the incident is part of a broader pattern of financial fraud in Nigeria, citing past cases such as MMM Nigeria (2016) and MBA Forex (2020), which also utilized digital platforms to exploit gaps in regulation and public financial literacy.

“We are witnessing an epidemic of false investment schemes. Millions of lives have been impacted, some ruined completely,” Abiru said. “These schemes thrive in an environment of youth unemployment, economic desperation, low financial literacy, and lax enforcement.”

Other lawmakers echoed the urgency of the situation. Senator Abdul Ningi (Bauchi Central) invoked Sections 88 and 89 of the Nigerian Constitution, which empower the legislature to investigate any authority or person charged with implementing the law.

“Our powers are clear. We must exercise them. Rural dwellers in my constituency were deceived into handing over their savings to CBEX with the promise of double returns,” Ningi lamented.

Senator Tahir Monguno (Borno North) called for urgent amendments to financial laws, noting that weak legal frameworks have allowed fraudulent schemes to evade detection and prosecution.

Senator Sadiq Umar (Kwara North) emphasized the government’s responsibility to protect citizens:

“Regulators have failed. People trust that the state will protect them. It’s time to hold institutions like CBN, SEC, EFCC, and NFIU accountable.”

Senator Solomon Adeola (Ogun West) raised concerns about the broader fintech ecosystem, warning that Ponzi schemes were just one piece of a much larger digital scam landscape.

“Where is our cybersecurity framework? Our people are being exploited by digital fraudsters every day,” he said.

Senate President Godswill Akpabio, in a moving address, compared the CBEX saga to past financial disasters such as the 1991 Umana Umana scheme in Port Harcourt, where scores of Nigerians lost their savings and lives.

“We’ve been here before. Nigerians invested money they couldn’t afford to lose. Families were torn apart. People committed suicide. We cannot allow this to happen again,” Akpabio warned.

He stressed the urgent need for a national public education campaign to improve financial literacy and warned that without decisive action, future victims were inevitable.

“We must not just investigate, we must educate. Let’s hold public hearings in all six geopolitical zones. Section 14(b) of our Constitution prioritises the welfare of our citizens. This is not optional. It’s an obligation,” he declared.

The Senate directed the Joint Committees to:

• Conduct a comprehensive investigative hearing
• Initiate public sensitisation campaigns
• Assess failures of regulatory bodies
• Recommend legal and institutional reforms

The committees are expected to report back within four weeks.

“This is no longer a routine matter. This is a national emergency,” Akpabio concluded. “If it doesn’t concern you today, it will concern your neighbor tomorrow.”

The CBEX scandal serves as a sobering reminder of the vulnerabilities in Nigeria’s digital and financial regulations. With millions affected, lawmakers now appear poised to crack down on Ponzi operators and establish a more transparent and secure investment environment.

Public pressure is also mounting on regulators, such as the Securities and Exchange Commission, the Central Bank of Nigeria, and the Economic and Financial Crimes Commission, to move beyond passive warnings and proactively monitor and shut down dubious financial platforms before they spiral out of control.