THE reported resumption of Crypto Bridge Exchange (CBEX) a controversial digital trading platform previously linked to the loss of investor funds has cast fresh doubt on the effectiveness of the Securities and Exchange Commission’s (SEC) campaign against Ponzi schemes.
Despite a ban by SEC and an ongoing probe by the Economic and Financial Crimes Commission (EFCC), Punch reported on Thursday, May 1, that CBEX has resumed operations. The platform has allegedly introduced new withdrawal options in an effort to regain investor trust.
Two CBEX users reportedly confirmed the resumption on Wednesday, claiming that withdrawals for existing investors whose funds were wiped out in April would begin from June 25, after a purported audit by a UK-based insurance firm. However, only new accounts are currently able to process withdrawals, while older accounts remain locked.
CBEX is notorious for promising investors a 100 per cent return within 30 days through supposed artificial intelligence (AI) trading. Many Nigerians are believed to have lost funds when the platform abruptly froze withdrawals on April 14.
In response to growing digital fraud, the SEC has been running public awareness campaigns under the banner “Say No to Ponzi Schemes.” On April 26 and May 1, the Commission visited Wuse and Garki markets in Abuja to educate traders about the risks of investing in unregistered platforms.
However, the CBEX comeback casts doubt on the impact of these efforts.
The ICIR contacted SEC and EFCC spokespeople – Efe Ebelo and Dele Oyewale – but received no response. However, two SEC officials confirmed the Commission lacks a dedicated app to verify investment schemes. Instead, it relies on whistleblower tips and intelligence to investigate and shut down fraudulent operations.
“Tracking fraudulent investment schemes requires insider knowledge from those involved, including information about accounts and platforms used,” one official said.
“Technology is crucial for the SEC to track and uncover these schemes. The current DG (Director General) is a strong proponent of using technology,” the official added.
There is however a dashboard maintained by SEC that can be used to verify if an organisation has undergone the necessary regulatory compliance. Called the Capital Market Operator Search (CMOS), the website provides the names and functions companies operating in the market are licensed to carry out.
The officials affirmed that the Commission is working with the EFCC to track illegal financial activity, aided by powers under the new Investment and Securities Act (ISA). They also expressed skepticism that CBEX promoters would boldly return, given the scale of alleged fraud.
Public reaction to CBEX’s return has been mixed. While some Nigerians vow never to reinvest, others see the reopening as a chance to recover lost funds despite strong warnings from regulators.
One affected investor, speaking anonymously, cautioned against optimism. “No Ponzi scheme refunds money to investors; rather, they cajole new investors to join to be able to pay a few investors and cash out the remaining chuck of the money for themselves,” he said. “If there are one million people who trade forex, about 950,000 will lose their money. While only 50,000 will gain something.”