•SEC moves to seize N1.3 trillion from CBEX over alleged Ponzi scheme
While the SEC has approached the Investment and Securities Tribunal (IST) seeking orders to freeze bank accounts and seize assets linked to CBEX and 25 other defendants, policy analysts argued that the magnitude of the losses reflects a deeper systemic failure across Nigeria’s financial supervision ecosystem.
Yemisi Ayinde, a financial advisor and public policy researcher at Covenant University, said the CBEX scandal exposed persistent structural gaps ranging from slow regulatory responses to inadequate oversight of high-risk digital platforms.
According to her, the SEC’s intervention, although necessary, came long after the warning signs became visible.
“Despite the fact that CBEX operates as an unregistered digital asset platform and exhibits characteristics consistent with high systemic risk, including outsized promised returns, potential liquidity mismatches, and exposure to retail investor vulnerabilities, the intervention was precipitated only after increasing scrutiny,” Ayinde said.
He argued that the situation “underscores the structural gaps in Nigeria’s financial regulatory architecture, where preventive supervision mechanisms, strict compliance enforcement and advance legal safeguards appear underdeveloped.”
Dr Ayinde rejected the popular narrative that victims of Ponzi schemes are the only ones to blame for late reporting. While many investors report only after losses occur, he argued that regulators must take responsibility for not implementing preventative tools early enough.
In the first session of the 6th Court in IST/0A/02/2025: SEC & Anor v CBEX and 25 others, the SEC urged the Court to compel commercial banks to freeze accounts linked to the defendants. The Commission also sought orders to seize houses, vehicles and other assets allegedly purchased with funds mobilized from unsuspecting Nigerians.
The Tribunal panel, chaired by Honorable Aminu Jinaidu, heard that CBEX was illegally operating by posing as a capital market and digital asset trading platform without registration or approval.
“CBEX is an unregistered platform that promises its users a 100 percent return on investments within 30 days, which is illegal,” the SEC told the Court, citing Section 3(b) of the Securities and Investments Act of 2025.
According to the Commission, international regulators had previously expressed concerns about CBEX. The Hong Kong Securities and Futures Commission issued a public notice in April 2024 describing the entity as a suspicious virtual asset operator using a name similar to that of a legitimate Chinese trading organization.
CBEX launched operations in Nigeria in early 2024, aggressively operating through a mobile app and website.
The company claimed that its “AI-powered trading engine” generated unusually high returns in the cryptocurrency markets. Investors were attracted by 100 percent returns within 40 to 45 days, a hallmark of Ponzi schemes.
In late 2024, the platform collapsed, leaving victims across Nigeria with staggering losses. Subsequent investigations revealed that the company diverted more than £1.3 billion (about $800 million) before closing and disappearing from digital channels.
The Court also noted that CBEX and the 25 defendants did not appear in court and were not represented. Honorable Jinaidu ordered that notices of hearings be served through national newspapers.
Analysts said the CBEX scandal reinforces concerns about Nigeria’s fragmented financial oversight, especially over cryptocurrency platforms, digital asset promoters and shadow investment entities that fall between regulatory jurisdictions.
Dr Ayinde warned that unless the regulatory architecture is strengthened, “future collapses may pose not only financial risks but also socio-economic and political threats.”
The matter was adjourned until January 27, 2026.