CBEX, a digital asset trading platform, lured investors with the promise of a 100% return on investment within 30 days, claiming to offer a secure and transparent trading environment.
However, the platform’s operations have recently come under intense scrutiny due to mounting allegations of fraud and deceptive tactics.
Reportedly, CBEX displays fabricated withdrawal records to conceal the difficulties users face when attempting to access their funds.
The Security and Exchange Commission (SEC) has officially labeled CBEX as a Ponzi scheme.
According to the recently enacted Investment and Securities Act (ISA) 2025, signed by President Bola Tinubu, it is now illegal for any entity to operate an online forex trading platform or provide related services without prior registration with the SEC.
The SEC has warned that any unregistered entity engaging in such activities will face sanctions and advised businesses planning to operate in these areas to contact the commission for registration guidance.
The SEC highlighted that the ISA 2025 has broadened its regulatory powers, explicitly mandating it to “register and regulate securities exchanges, commodity exchanges, virtual and digital asset exchanges, and other market venues.”5
This development comes as numerous Nigerians on social media are reporting significant financial losses, with CBEX allegedly absconding with over N1.3 trillion from investors’ accounts.
The platform reportedly crashed on Monday, leaving investors unable to access their funds.
CBEX allegedly locked its Telegram channels and delayed withdrawals, offering investors a supposed lifeline of $2,000 for a $200 verification fee and $1,000 for a $100 verification fee.
Analyzing the crash on an X (formerly Twitter) space organized by Trending X, cryptocurrency expert and security analyst Taiwo Owolabi stated that data indicates the funds were allegedly transferred to a specific TRX address (TDqSquXBgUCLYvYC4XZgrprLK589dkhSCf), with the total amount stolen in USDT estimated at $847 million and likely to increase.
Owolabi explained that investors’ funds became inaccessible because CBEX is not a licensed platform. He noted that the creators designed a deceptive website resembling ByBit, a legitimate trading platform, to mislead users.
He further elaborated that payments were directed to a TRX account, from which they were immediately moved, consolidated, and converted to USDT and then ETH. Consequently, users logging into their accounts saw fabricated numbers, as no actual funds remained in their profiles.
The daily “trading” activities and AI trading were also described as fake.
According to Owolabi, when withdrawals were attempted, users would receive funds from other investors, perpetuating the Ponzi scheme as reinvestment due to perceived gains would fund subsequent payouts.
Owolabi cautioned that all invested funds are likely gone, suggesting that the verification fees were a tactic to pay off some investors while leaving the majority with losses, a common characteristic of Ponzi schemes.
The SEC reiterated its warning against Ponzi schemes, emphasizing its expanded regulatory authority under the ISA 2025 to oversee virtual and digital asset exchanges and online forex platforms.
The Director-General of the SEC, Dr. Emomotimi Agama, hailed the new law as a “landmark step” towards a more inclusive and robust Nigerian capital market aligned with global best practices.
He stated that the ISA 2025 provides the SEC with the legal framework to offer clarity, ensure investor protection, and boost market confidence, particularly in previously unregulated sectors like digital asset exchanges and online forex platforms.
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