Why Justice Remains Elusive for Victims
Ponzi schemes are not new in Nigeria , they’ve only evolved in strategy and scale From MMM to MBA Forex, sweet talking supposed traders and more recently CBEX , these fraudulent investment platforms have left millions of Nigerians financially devastated DUE TO ONE THING ….. GREED. People fall for Ponzi schemes over and over because they believe the impossible: the dream of easy, quick wealth without effortThe promise of high returns taps into a deep-seated greed, and that greed blinds them to obvious red flags. They ignore the warning signs, trusting the false promise that others are profiting, and they want in before the “opportunity” vanishes. Before you judge me and say I am judging or being too harsh I myself was once a victim and Swore never be that greedy and unwise again.
The truth is, people want easy money. We want to believe in the get-rich-quick promise and ignore the warning signs because, deep down, we all think “it won’t happen to me.
Here’s the brutal truth: Ponzi schemes prey on your emotions, and your need for quick financial relief. They convince you that success is about the right timing, luck, or insider knowledge. This false hope is often too hard to resist.
Why do people keep falling for them?
- Greed: Everyone wants that “big payout” without the hard work.
- Peer Pressure: When everyone around you is talking about it, it’s easy to jump in.
- Ignorance: Most people don’t understand what a Ponzi scheme really is, or how to spot one.
- Desperation: In tough times, we want quick solutions, even if they sound too good to be true.
Here’s a look at some of the most notorious:
1. MMM Nigeria (2016)
What happened:
MMM, a global Ponzi scheme that made its way to Nigeria in 2015, promised returns of 30% per month on investments. Participants were encouraged to “help” others by donating to their accounts and in return, they’d receive the same amount, plus interest, from new participants.I remember being in school then and everyone was cashing out with MMM…..
- How it ended:
In December 2016, the scheme “paused” due to liquidity problems, with the founder, Sergei Mavrodi, claiming it was a temporary break. However, many investors were unable to withdraw their funds, and billions of naira disappeared. Despite massive public outcry, no major legal action was taken, and the scheme eventually disappeared. Thousands of Nigerians lost their investments……
MBA Forex (2020)
What happened:
MBA Forex promised lucrative returns through forex trading and investment. The scheme operated for a short period, attracting millions of naira from unsuspecting investors who were promised up to 50% returns…. Imagine . It used the allure of forextrading to disguise the Ponzi nature of the operation.
How it ended:
In 2020, the scheme collapsed after it could no longer meet its financial obligations. The promoters of MBA Forex vanished, and despite the claims of “investment experts” and testimonials from participants, investors lost billions. Legal actions were slow, and the founders were difficult to trace.
NOSPECTO OIL & GAS LTD.
WHAT HAPPENED?
Before MMM, CBEX and other Ponzi schemes, was a Nigerian company called NOSPECTO OIL AND GAS that operated a controversial investment scheme between 2004 and 2005. The company offered individuals the opportunity to invest ₦450,000 per slot, promising a monthly return of ₦40,000. The scheme attracted over 13,000 investors many of whom were pensioners and retirees seeking reliable income streams.
In 2007, the Securities and Exchange Commission (SEC) declared Nospecto’s operations illegal, categorizing it among 48 entities labeled as Wonder Banks unregulated financial institutions promising unrealistic returns. The SEC froze Nospecto’s accounts and transferred approximately ₦22.45 billion of investors’ funds to the Central Bank of Nigeria (CBN) for safekeeping.
HOW IT ENDED
The Investors initiated legal action through the Investment and Securities Tribunal (IST), which ruled in their favor, affirming their ownership of the funds. Nospecto appealed this decision, however both the Court of Appeal and the Supreme Court upheld the IST’s judgment. In 2021, the Supreme Court confirmed that the funds belonged to the investors and directed that they could approach appropriate courts for recovery
Despite this favorable ruling, the process of disbursing the funds to investors has been protracted. Many investors have faced challenges in recovering their investments, with some passing away before seeing any restitution. The Nospecto case underscores the importance of regulatory oversight and the need for investors to exercise due diligence before participating in investment schemes
CBEX (2024)
What happened:
CBEX, a cryptocurrency and forex-based Ponzi scheme, truth I told personally never heard about it till it’s unfortunate pack up . CBEX promised returns of 15-20% monthly to its investors. It claimed to trade on the global forex and crypto markets using an automated trading bot.
How it ended:
In 2024, after attracting millions of dollars in investment, CBEX suddenly shut down its platform, citing technical issues. Investors were left unable to withdraw their funds, and the platform’s operators disappeared without a trace. Legal efforts to track the operators have been sluggish, with many victims left without recourse. The collapse of CBEX marks another example of how lack of regulation and investors due diligence allowed such a scheme to flourish.
The Aftermath
While some of these schemes were met with investigations from EFCC and the Securities and Exchange Commission (SEC), the recovery of funds has remained largely impossible due to the anonymous and untraceable nature of the operators.
In many cases, investors were left without justice as legal frameworks struggled to address the rapid growth and collapse of these scams. Despite the legal provisions in place and cases like NOSPECTO , the mode of operation of these schemes often leaves victims with little to no hope for justice or recovery.
Nigeria has multiple laws that criminalize Ponzi operations some of which are
– Advance Fee Fraud and Other Related Offences Act (2006) – criminalizes obtaining money under false pretenses.
– Investment and Securities Act (ISA) 2007 – prohibits unregistered investment solicitations.
– Criminal Code Act (Section 419) – addresses obtaining by false pretenses.
– EFCC Act (2004) – enables prosecution and asset recovery for financial crimes.
In all honesty , these laws are robust. In practice,however enforcement is the challenge.
WHAT IS YOUR TAKE AWAY FROM THIS WRITE UP
Why Nigerians Must Rethink “Quick Money”
The collapse of CBEX, one of the most recent and elaborate Ponzi schemes in Nigeria, is a harsh reminder that despite public awareness and legal frameworks, thousands still fall victim to financial scams promising fast returns.
CBEX operated under the guise of crypto and forex trading, using sleek branding and vague terminology like “automated bots” and “global investment cycles” to lure unsuspecting investors. In truth, it was yet another Ponzi scheme, built on unrealistic returns and the continuous inflow of new participants.
Here are the hard lessons CBEX—and Ponzi schemes before it—have reinforced
1. People’s Greed and Desperation Are Still Being Exploited
Nigeria has proven times without number to desperately jump into situations without due diligence and legal advice . They behave like lawyers do not want the best and easiest ways for them to make money . CBEX promised up to 15–20% monthly returns a red flag by any financial standard. Yet, many still ignored common sense, driven by financial desperation or the desire for fast wealth. When money is tight, the illusion of quick profit can feel like a lifeline in reality it’s bait.
2. The Fancy Terminology Does Not Equal Legitimacy
Nigerians relax ! Big grammar does not equate to legitimacy.CBEX used buzzwords like blockchain, crypto, forex, smart trading, and AI systems to mask its true nature. These terms gave it a modern appeal and made it harder for people to question its operations. Many believed that because it involved “technology,” it must be legitimate.
3. Unregulated Entities Are Dangerous
DID YOU KNOW CBEX was not registered with the Securities and Exchange Commission (SEC) or licensed by the Central Bank of Nigeria (CBN)?if you ask half of CBEX investors you would realize a lot do not know if CBEX was registered with the above , thousands invested without conducting basic due diligence. The absence of regulation made it easier for the platform to vanish without accountability.
4. Anonymity Enables Fraud
MMM, CBEX and other ponzis had no physical office, no known founder, and no official customer support. Everything was handled online through Telegram groups and referral links. Once the scheme collapsed, there was no one to hold accountable a pattern seen in many previous scams.
5. Legal Recourse Is Often Unavailable
Just like with MMM, MBA Forex, and Nospecto, victims of CBEX were left with little hope for justice . cases like nospecto has at least some sort of justice was served but years later . Because the operators were anonymous and often operated across borders, the law was slow to catch up, and asset recovery was nearly impossible.
6. Trust Is No Substitute for Verification
My very first and ponzi investment was in school my room mate had been cashing out seriously and I tried with my N5,000 to get N10,000 , it ended in tears . Many investors join these schemes based on referrals from friends, family, or community groups. The false sense of security from personal connections replaced actual verification. Unfortunately, trusting someone who was also misled doesn’t make the scheme legitimate.
What Needs to Change
- Financial Literacy Must Improve: Nigerians need better education on investment fundamentals, risk assessment, and how to verify financial entities.
- Regulators Must Act Faster: The SEC and EFCC must enhance digital surveillance and collaborate with tech platforms to flag unlicensed investment schemes early.
- Legal Professionals Must Lead Public Advocacy: Law firms, like ours at O&P Solicitors, must be part of the public conversation educating citizens and helping victims seek any possible redress.
Final Word
CBEX may be gone, but its pattern is not new and it won’t be the last sadly . We will still have people that lost from CBEX still invest in future schemes.Until the culture of something for nothingis replaced with intentional financial discipline, Ponzi schemes will keep finding new forms and new victims in Nigeria.