The Senate Committee on Banking, Insurance and Other Financial Institutions has commenced a comprehensive investigation into the operations of Ponzi schemes in Nigeria, following revelations that about N1.3 trillion was linked to the collapsed Crypto Bullion Exchange (CBEX) investment platform.
The development emerged during a one-day public hearing on a motion to investigate Ponzi schemes in the country, with particular reference to the CBEX incident, alongside deliberations on a proposed amendment to the Banks and Other Financial Institutions Act (BOFIA 2020).
Chairman of the Committee, Senator Mukhail Adetokunbo Abiru, said the investigative hearing and amendment bill were designed to close regulatory loopholes exploited by unlicensed digital investment platforms and fraudulent operators.
Representing the Executive Chairman of the Economic and Financial Crimes Commission, Mr. Olanipekun Olukoyede, at the hearing, the agency’s Cybercrime Section Supervisor, Dein Whyte, presented detailed findings from ongoing investigations into CBEX and similar schemes.
Whyte disclosed that CBEX, also known as Crypto Bullion Exchange, began operations in mid-2024 and lured investors with promises of 100 per cent returns through purported artificial intelligence-driven cryptocurrency trading.
According to him, although preliminary estimates placed total investor exposure at about N1.3 trillion, blockchain analysis so far traced over $46 million in stablecoin (USDT) inflows into digital wallets linked to the scheme.
He explained that the promoters required victims to convert their naira into digital assets before investing, thereby avoiding direct cash trails and complicating recovery efforts.
Investigations further revealed that the platform operated through aggressive online and physical promotions, including conferences, and registered a special purpose vehicle with the Corporate Affairs Commission under a different name.
The anti-graft agency uncovered collaboration between Nigerian promoters and foreign partners based in Southeast Asia. Some digital infrastructure linked to the scheme has been seized, certain funds frozen, while Nigerian promoters are currently facing prosecution for operating an unlicensed exchange.
The commission also clarified that the operators had secured only an onboarding certificate from its Special Control Unit Against Money Laundering but misrepresented it as full regulatory approval.
During the session, senators expressed concerns over the increasing use of fintech platforms, including Opay and Moniepoint, by fraudsters and kidnappers to receive illicit funds.
The Chief Whip of the Senate recounted a personal experience involving an attempted digital fraud and questioned why such platforms appear to be preferred channels for criminal transactions.
In response, a representative of Moniepoint attributed the platform’s widespread use to accessibility, affordability and instant transaction confirmation. He, however, acknowledged challenges in tracing funds where individuals sell their identities or allow third parties to use their accounts.
The representative assured lawmakers that the company plans to expand its physical branch presence nationwide before 2028 to enhance accountability and strengthen customer complaint mechanisms.
Stakeholders at the hearing largely supported the proposed BOFIA amendment but cautioned against regulatory overlaps. Financial operators urged lawmakers to harmonise any new reporting requirements with existing obligations under the Central Bank of Nigeria to prevent duplication.
Some senators also raised concerns about possible conflicts between the proposed amendments and provisions of the Nigerian Communications Act, recommending a technical review to eliminate inconsistencies.
The committee subsequently resolved to constitute a technical team made up of regulatory experts, legal practitioners and financial sector stakeholders to review submissions and refine the proposed legislation.
Senator Abiru emphasised that the ultimate goal is to produce a conclusive and practical legal framework capable of strengthening Nigeria’s financial system, enhancing consumer protection and preventing future large-scale investment fraud.
The public hearing comes amid mounting concerns over digital investment scams, with the EFCC warning that despite repeated advisories, many Nigerians continue to patronise high-yield schemes promising unrealistic returns. Lawmakers said the outcome of the probe would inform stronger regulatory safeguards aimed at restoring public confidence in the nation’s financial ecosystem.
