The Senate Committee on Banking, Insurance and Other Financial Institutions has commenced a comprehensive investigation into the operations of Ponzi schemes in Nigeria, following revelations that about N1.3 trillion was linked to the collapsed Crypto Bullion Exchange (CBEX) investment platform.
The development emerged during a one-day public hearing on a motion to investigate Ponzi schemes in the country, with particular reference to the CBEX incident, alongside deliberations on a proposed amendment to the Banks and Other Financial Institutions Act (BOFIA 2020).
Chairman of the Committee, Senator Adetokunbo Abiru, said the investigative hearing and amendment bill were aimed at closing regulatory loopholes exploited by unlicensed digital investment platforms and fraudulent operators.
Representing the Executive Chairman of the Economic and Financial Crimes Commission (EFCC), Olanipekun Olukoyede, at the hearing, the agency’s Cybercrime Section Supervisor, Dein Whyte, presented detailed findings from ongoing investigations into CBEX and similar schemes.
Whyte disclosed that CBEX, also known as Crypto Bullion Exchange, began operations in mid-2024 and lured investors with promises of 100 percent returns through purported artificial intelligence-driven cryptocurrency trading.
According to him, although preliminary estimates placed total investor exposure at about N1.3 trillion, blockchain analysis has so far traced over 46 million dollars in stablecoin (USDT) inflows into digital wallets linked to the scheme.
He explained that the promoters required victims to convert their naira into digital assets before investing, thereby avoiding direct cash trails and complicating recovery efforts.
Investigations further revealed that the platform operated through aggressive online and physical promotions, including conferences, and registered a special purpose vehicle with the Corporate Affairs Commission under a different name.
The anti-graft agency uncovered collaboration between Nigerian promoters and foreign partners based in Southeast Asia.
Some digital infrastructure linked to the scheme has been seized, certain funds frozen, while Nigerian promoters are currently facing prosecution for operating an unlicensed exchange.
The commission also clarified that the operators had secured only an onboarding certificate from its Special Control Unit Against Money Laundering, but misrepresented it as full regulatory approval.
The EFCC disclosed that it is prosecuting Nigerian promoters of the collapsed Crypto Bullion Exchange over their involvement in the alleged multi-million-dollar Ponzi scheme.
In his remarks, Deputy Governor for Financial System Stability at the Central Bank of Nigeria, Philip Ikeazor, welcomed key innovations in the proposed amendment, particularly the establishment of a registry for systemically important financial institutions.
During the session, senators expressed concerns over the increasing use of fintech platforms by fraudsters and kidnappers to receive illicit funds.
Some senators also raised concerns about possible conflicts between the proposed amendments and provisions of the Nigerian Communications Act, recommending a technical review to eliminate inconsistencies.
The committee subsequently resolved to constitute a technical team made up of regulatory experts, legal practitioners and financial sector stakeholders to review submissions and refine the proposed legislation.
Senator Abiru emphasised that the ultimate goal is to produce a conclusive and practical legal framework capable of strengthening Nigeria’s financial system, enhancing consumer protection and preventing future large-scale investment fraud.
The public hearing comes amid mounting concerns over digital investment scams, with the EFCC warning that despite repeated advisories, many Nigerians continue to patronise high-yield schemes promising unrealistic returns.
Lawmakers said the outcome of the probe would inform stronger regulatory safeguards aimed at restoring public confidence in the nation’s financial ecosystem.
(Editor: Ada Ononye)
