Senate launches probe into ponzi schemes, orders public hearing on CBEX
The Senate has directed its relevant Committees to undertake a thorough investigation and convene a public hearing into the operations of Ponzi schemes in Nigeria, following the collapse of the Crypto Bullion Exchange (CBEX), which reportedly defrauded investors of over N1.3 trillion.
The investigation will be conducted by the Committees on Capital Market; Banking, Insurance and Other Financial Institutions; Anti-Corruption and Financial Crimes; and ICT and Cybercrime. The joint committees are expected to report their findings within four weeks.
This decision followed the adoption of a motion at Wednesday’s plenary titled “Investigative hearing into the operations of Ponzi Schemes in Nigeria, with particular reference to the recent Crypto Bullion Exchange (CBEX) incident.”
The motion was sponsored by Senator Adetokunbo Abiru (APC, Lagos) and Senator Osita Izunaso (APC, Imo).
Presenting the motion, Senator Abiru described the financial security of Nigerians as fundamental to national stability and development. He stressed the responsibility of government to shield citizens from deceptive, exploitative, and fraudulent financial activities that threaten livelihoods.
He expressed deep concern over the continued rise and spread of unregulated Ponzi and pyramid schemes, citing notorious cases such as MMM Nigeria in 2016 and MBA Forex in 2020. These schemes, he noted, had collectively defrauded millions of Nigerians, leading to untold financial hardship, psychological distress, family disintegration, and in extreme cases, suicide.
The senator described the CBEX collapse as one of the most catastrophic financial scams in Nigeria’s history, stating that the digital investment platform deceived investors with promises of extraordinary returns before vanishing with more than N1.3 trillion in investor funds.
He said: “CBEX is not an isolated incident, but part of an expanding pattern of fraudulent schemes that exploit technology and social media to mislead the public. These platforms often employ referral incentives, celebrity endorsements, and fabricated testimonials to build false credibility and lure unsuspecting Nigerians.”
Abiru further noted that CBEX operated unchecked for a prolonged period without any intervention or sanction from regulatory agencies, including the Securities and Exchange Commission (SEC), the Central Bank of Nigeria (CBN), the Nigerian Financial Intelligence Unit (NFIU), or the Economic and Financial Crimes Commission (EFCC).
He warned that a combination of rising youth unemployment, widespread poverty, poor financial literacy, and limited access to formal investment opportunities continues to expose Nigerians to such fraudulent schemes.
Citing Section 88(1)(a) and (b) of the 1999 Constitution (as amended), Senator Abiru asserted that the National Assembly is constitutionally empowered to investigate any issue within its legislative remit. He said the Senate must examine the apparent regulatory failures surrounding the CBEX scandal and recommend appropriate legislative or policy reforms to prevent future occurrences.
He also condemned the apparent lack of real-time monitoring and coordination among regulatory bodies, saying this has enabled fraudsters to thrive, undermined confidence in legitimate financial institutions, and posed broader risks to economic stability.
The senator called for urgent public enlightenment campaigns to inform citizens about the dangers of Ponzi schemes and the tactics used by fraudsters.
The motion was widely endorsed by several lawmakers, including Senators Mohammed Monguno (APC, Borno), Adamu Aliero (APC, Kebbi), Solomon Adeola (APC, Ogun), and Abdul Ningi (PDP, Bauchi), who all acknowledged the devastating impact of these scams.
In his remarks, Senate President Godswill Akpabio described the motion as timely and relevant, insisting that those behind such schemes must face stiff penalties. He also called for intensified efforts to educate Nigerians on how to identify and avoid fraudulent investment platforms.