From MMM to CBEX: Why Nigerians Keep Losing Billions to Ponzi Schemes.
Another day, another collapsed investment platform, another wave of devastated Nigerians counting their losses. The recent downfall of CBEX, a cryptocurrency and forex trading platform that allegedly wiped out over ₦1.3 trillion in investor funds, marks the latest chapter in Nigeria’s long, painful history with Ponzi schemes.
From MMM in the mid-2010s to Cubit Cube in 2023 and now CBEX, the pattern is the same—flashy promises, aggressive marketing, a period of “too good to be true” payouts, and then a sudden collapse leaving thousands in financial ruin. Yet, despite the repeated warnings, Nigerians continue to pour money into these schemes.
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Panic spread among CBEX users when they discovered their accounts had been emptied without warning over a weekend in April. Investors who had deposited sums ranging from ₦200,000 to over ₦5 million found themselves locked out of their accounts, their life savings seemingly vanished into thin air.
The timing was particularly cruel. Just days earlier, on April 11, the platform had suspended withdrawals while promising users they could access their funds by April 15. When that date arrived, instead of their expected payouts, investors were met with empty accounts and deafening silence from CBEX administrators.
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One affected investor, a Lagos-based IT consultant, described the moment of realization: “At first I thought it was just a system error. But when the withdrawal button kept failing and customer support went offline, the terrible truth sank in – my money was gone.”
The Evolution of Financial Scams in Nigeria
Modern Ponzi schemes have shed their crude, obvious nature, adopting sophisticated disguises that make them nearly indistinguishable from legitimate businesses:
- The Digital Facade
Today’s scams leverage the credibility of fintech and cryptocurrency trends. CBEX presented itself as a cutting-edge trading platform, while Cubit Cube went so far as to get its token listed on Binance, the world’s largest crypto exchange. - Psychological Manipulation Tactics
These platforms employ:
- Fake testimonials from paid influencers
- Manufactured “success stories” of early investors
- Limited-time offers creating artificial scarcity
- Complex financial jargon to confuse potential victims
- The Illusion of Legitimacy
Many operate with:
- Professional-looking websites and apps
- Physical office addresses (often rented short-term)
- Paid media placements in reputable outlets
- Corporate registration documents (easily faked)
Why the Cycle Continues
Several interconnected factors explain why these scams persist despite widespread awareness:
Economic Pressures
With inflation at 33.2% and unemployment rising, many Nigerians see these schemes as their only hope for financial survival. The promise of 200% monthly returns becomes irresistible when facing desperate circumstances.
Financial Illiteracy
Most victims don’t understand basic investment principles. They confuse Ponzi payouts with actual profits, not realizing their “returns” simply come from new victims’ deposits.
The Nigerian Hustle Mentality
The “get rich quick” culture permeating Nigerian society makes people particularly vulnerable. Many enter knowing it’s likely a scam but believe they can “outsmart the system” by cashing out early.
Regulatory Failures
Government responses typically come too late. The lack of:
- Preemptive monitoring of investment platforms
- Swift enforcement actions
- Public education campaigns
Creates an environment where scams can flourish.
A Deeper Societal Problem?
Some argue these schemes thrive because they fill a void left by:
- Banks offering negligible interest rates
- A stock market perceived as rigged
- Few legitimate high-return investment options for average Nigerians
Others point to deeper cultural issues – a normalization of “smart fraud” and the celebration of ill-gotten wealth in popular culture.
Questions for Reflection
As we examine this recurring tragedy:
- Is this purely a law enforcement issue, or does responsibility lie with individuals who ignore warnings?
- Could stricter financial regulations prevent these scams, or would they simply drive them underground?
- How can financial education be made more effective in a country where many prioritize immediate survival over long-term planning?
- Are these schemes a symptom of broader systemic failures in Nigeria’s economic structure?
The discussion remains open.
From MMM to CBEX: Why Nigerians Keep Losing Billions to Ponzi Schemes.
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