Investors in CBEX are now grappling with losses, as the promised 100% returns have proven to be unattainable for Nigerians and Kenyans alike.
### CBEX: A Confirmed Ponzi Scheme
In recent news, the Crypto Bullion Exchange (CBEX), also known as Crypto Bridge Exchange, has been exposed as a Ponzi scheme, leaving millions of investors in Nigeria and other countries with significant financial losses.
The scheme, which promised investors a 100% return on investment each month, operated by promising unusually high returns to investors[1]. It used tactics such as social media, referral commissions, celebrity endorsements, and fake testimonials to lure in victims[1]. The platform exploited weak regulatory oversight to operate without proper authorization[2].
Suspicions of a Ponzi scheme arose when users could not withdraw both their deposits and the promised returns last week, which CBEX attributed to a hack[1]. However, it was later revealed that CBEX did not trade users' funds using AI-provided signals; instead, it paid ROI to old customers using the deposits of new ones[1].
The failure to process withdrawals has raised serious concerns about CBEX's legitimacy, with the director general of Nigeria's Securities and Exchange Commission (SEC) warning users that Ponzi schemes like CBEX, which are not registered with the SEC, are scams[1].
Moreover, CBEX is part of a larger global network of crypto scams and money laundering crimes operating out of Southeast Asia[3]. The alleged withholding of millions in customer funds by CBEX is a cause for concern, as the nature of Ponzi schemes often involves financial activities that can be conducive to money laundering[3].
The CBEX incident underscores the need for tighter regulation and oversight to prevent similar incidents. Its operation within the broader context of crypto scams emphasizes the importance of public awareness and vigilance when it comes to investing in digital assets.
[1] Nairametrics (2021). "CBEX: A Ponzi scheme that defrauded millions of Nigerians." Retrieved from https://nairametrics.com/cbex-ponzi-scheme/
[2] TheCable (2021). "CBEX: How the Ponzi scheme defrauded millions of Nigerians." Retrieved from https://thecable.ng/cbex-how-the-ponzi-scheme-defrauded-millions-of-nigerians/
[3] The Guardian (2021). "CBEX: Nigeria's $847m crypto scam is part of a global trend." Retrieved from https://www.theguardian.com/world/2021/apr/28/cbex-nigerias-847m-crypto-scam-is-part-of-a-global-trend
- The failure of the Crypto Bullion Exchange (CBEX) highlights the need for stricter regulation and oversight of cryptocurrency investments, particularly in countries like Nigeria, given that the platform operated without proper authorization.
- Investing in digital assets such as Bitcoin and other cryptocurrencies requires vigilance to avoid Ponzi schemes like CBEX, which exploited weak regulations to promise investors unrealistically high returns and exploit their funds.
- Blockchain technology, while promising in various fields, can be misused in fraudulent activities like Ponzi schemes, as demonstrated by the CBEX case, which is part of a larger global network of crypto scams.
- It is crucial for the Securities and Exchange Commission (SEC) in Nigeria, and other similar regulatory bodies worldwide, to crack down on unauthorized digital asset exchanges like CBEX to protect investors and maintain the integrity of the finance and technology sectors.
