Senate Opens Probe as EFCC Links N1.3 Trillion to Collapsed CBEX Ponzi Scheme

Nigeria’s Senate has launched a sweeping investigation into the operations of Ponzi schemes across the country after the Economic and Financial Crimes Commission (EFCC) revealed that about N1.3 trillion was tied to the collapsed Crypto Bullion Exchange (CBEX) investment scheme.
The Senate Committee on Banking, Insurance and Other Financial Institutions initiated the probe during a one-day public hearing on Wednesday, examining the growing threat of fraudulent investment platforms and considering amendments to the Banks and Other Financial Institutions Act (BOFIA) 2020.
Chairman of the committee, Mukhail Adetokunbo Abiru, said both the legislative review and the investigative hearing were designed to close regulatory loopholes exploited by unlicensed digital platforms and fraudulent investment operators.
At the hearing, the Executive Chairman of the Economic and Financial Crimes Commission, Olanipekun Olukoyede, represented by cybercrime supervisor Dein Whyte, presented preliminary findings from investigations into CBEX and other emerging Ponzi operations.
According to the EFCC, the Crypto Bullion Exchange, which began operations around mid-2024, lured investors with promises of 100 per cent returns through artificial intelligence-driven cryptocurrency trading.
While early estimates suggested that Nigerians may have lost up to N1.3 trillion, blockchain analysis conducted by investigators traced more than $46 million in stablecoin (USDT) inflows into digital wallets linked to the scheme.
Whyte told lawmakers that the operators required victims to convert their naira into digital assets before investing, effectively masking direct cash trails.
“The promoters ensured that victims converted their naira into digital assets before investing, thereby avoiding direct cash trails,” he said.
Investigators also revealed that CBEX aggressively promoted its operations both online and offline, organising conferences and even registering a special purpose vehicle with the Corporate Affairs Commission under a different name to appear legitimate.
The EFCC further disclosed that Nigerian promoters worked with foreign collaborators based in Southeast Asia. Authorities have since seized parts of the scheme’s digital infrastructure, frozen some funds, and commenced prosecution of local promoters accused of operating an unlicensed exchange.
The anti-graft agency also clarified that the operators had only obtained an onboarding certificate from its Special Control Unit Against Money Laundering, which they allegedly misrepresented as full regulatory approval.
During the hearing, several senators raised concerns about the growing use of fintech platforms such as OPay and Moniepoint by fraudsters and kidnappers to receive illicit funds.
In response, a Moniepoint representative said the platform’s widespread use is driven by accessibility, affordability and instant transaction confirmation, but acknowledged difficulties in tracking funds when individuals sell their identities or allow third parties to operate their accounts.
The company said it plans to expand its physical branch network across the country before 2028 to strengthen customer verification and accountability.
Stakeholders at the session largely supported the proposed amendments to BOFIA but warned against regulatory overlaps. Financial operators urged lawmakers to align new reporting requirements with existing obligations under the Central Bank of Nigeria to avoid duplication.
Some senators also pointed to potential conflicts between the proposed changes and the Nigerian Communications Act, recommending a technical review.
The committee resolved to set up a team of regulatory experts, legal practitioners and financial sector stakeholders to refine the proposed legislation.
Senator Abiru said the goal is to produce “a conclusive and useful legislation” capable of strengthening Nigeria’s financial system, improving consumer protection and preventing large-scale investment fraud.
The hearing comes amid rising concern over digital investment scams in Nigeria, despite repeated warnings from the EFCC that many high-yield schemes promising unrealistic returns are fraudulent. Lawmakers say the outcome of the investigation will shape stronger safeguards to restore public confidence in the country’s financial ecosystem.