The senate expressed shock that CBEX operated unchecked for months despite its large-scale activities and online visibility, with no timely intervention from regulatory agencies.
The senate has launched a full-scale investigation into the alarming rise of ponzi schemes across Nigeria, following the collapse of the controversial Crypto Bullion Exchange (CBEX), which allegedly defrauded investors of over ₦1.3 trillion.
This followed the adoption of a motion titled “Investigative hearing into the operations of Ponzi schemes in Nigeria, with particular reference to the recent Crypto Bullion Exchange (CBEX)”, sponsored by Sen. Adetokunbo Abiru (APC, Lagos east) and co-sponsored by Sen. Osita Izunaso (APC, Imo west) during plenary on Thursday.
Unregulated operations, regulatory failure
In leading the motion, Sen. Abiru lamented the unchecked operations of CBEX for several months despite its large-scale digital footprint and aggressive recruitment tactics. He expressed dismay that relevant agencies including the Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN), Nigerian Financial Intelligence Unit (NFIU), and the Economic and Financial Crimes Commission (EFCC) failed to intervene in time.
According to him, CBEX, like previous fraudulent investment platforms such as MMM Nigeria (2016) and MBA Forex (2020), exploited widespread financial desperation, low financial literacy, and the lack of strong regulatory enforcement to lure millions of Nigerians with promises of unrealistic returns.
He noted that the scheme eventually collapsed, leaving a trail of broken lives, depression, family breakdowns, and in some extreme cases, suicides.
Sen. Abiru observed that CBEX’s use of digital platforms, referral bonuses, celebrity endorsements, and fabricated testimonials reflects a broader and more dangerous trend in financial fraud.
He emphasised that as these schemes grow more sophisticated, Nigerians particularly the unemployed and poor remain dangerously vulnerable.
He therefore called on the senate to invoke its constitutional oversight powers to investigate why regulators failed to act and recommend policy or legal reforms to prevent similar frauds in the future.
Lawmakers express outrage
During the debate, several senators described the CBEX collapse as a national tragedy and criticised the failure of oversight institutions.
Sen. Sadiq Umar (APC, Kwara north) described the emotional and financial trauma of ponzi scheme victims as grave, noting that some were driven to suicide. “We must hold regulators accountable,” he said.
Sen. Adamu Aliero (APC, Kebbi central) called out fintech firms using innovation as a smokescreen for fraud. “The CBN must explain what safeguards it has in place,” he said. He later added that victims must also take some responsibility. “Nigerians fall for tempting offers that promise unrealistic returns. They must be more discerning,” he said.
On his part, Sen. Abdul Ningi (PDP, Bauchi central) cited Section 14(b) of the Constitution, which mandates government to ensure citizens’ welfare and security. “Our financial system is being gamed. If we don’t act, more lives and livelihoods will be lost,” he warned.
The chief whip of the senate, Sen. Tahir Monguno (APC, Borno north), described the trade in ponzi schemes as alarming. “These scams are undermining economic growth and preying on vulnerable Nigerians. How are they operating so freely under the watch of regulatory bodies?” he asked.
In a deeply personal contribution, Senate President Sen. Godswill Akpabio recounted the story of a failed ponzi scheme in the early 1990s in Port Harcourt known as Omana. According to him, victims were promised outrageous returns and stashed cash in warehouses some of which were eaten by rats.
“We saw suicides then. We’re seeing them again now. It’s tragic and unacceptable,” he said.
Akpabio strongly endorsed the motion, calling for urgent legislative action. He also proposed a nationwide financial literacy campaign to educate citizens about the dangers of fraudulent investment schemes.
Resolution
Following the debate, the senate resolved to mandate a joint committee to investigate the operations of ponzi schemes in Nigeria and the specific circumstances surrounding the CBEX collapse.
The joint committees on Capital Market; Banking, Insurance and Other Financial Institutions; Anti-Corruption and Financial Crimes; and ICT and Cybercrime have been tasked to conduct a comprehensive investigation, including a public hearing.
They are expected to submit their findings and recommendations to the senate within four weeks.
