Cashcraft and CBEX: Twin Pillars Of Ponzi Predation In Nigeria

Cashcraft and CBEX: Twin Pillars Of Ponzi Predation In Nigeria

The recent collapse of Crypto Bridge Exchange Smart-Treasures, popularly known as CBEX—a digital asset platform—has triggered widespread despair and heartbreak across Nigeria. The platform’s sudden disappearance on Monday left thousands reeling, with some victims reportedly contemplating suicide, having lost life savings, pensions, and dreams of financial security.

Experts estimate that the CBEX scheme alone may have defrauded Nigerians of approximately ₦1.4 trillion, underscoring its devastating impact. Combined with losses from previous Ponzi operations, the total estimated loss to Nigerians since 2016 now stands at a staggering ₦1.7 trillion….READ MORE….

Despite being a foreign entity—allegedly Chinese-owned—without a verifiable physical presence in Nigeria, CBEX enticed unsuspecting Nigerians with promises of high returns. This has led some to dismiss the victims as greedy, with a subtle undertone of blame suggesting they are responsible for their own misfortune.

Responding to the crisis, the Economic and Financial Crimes Commission (EFCC) reiterated that it had consistently warned the public against investing in such fraudulent schemes. EFCC spokesperson Dele Oyewale stated that in March 2024, the agency released a list of 58 identified Ponzi operators, including CBEX, and has continually urged Nigerians to exercise caution and verify the legal status of investment platforms.

In a related editorial, The Guardian published guidelines to help the public identify fraudulent schemes—highlighting characteristics such as unrealistic returns, pressure to recruit others, guaranteed profits, anonymous ownership, and lack of regulatory compliance. While helpful, these indicators are not always sufficient.

Ponzi schemes in Nigeria defy predictable patterns. Legitimate financial institutions—banks, insurers, and stockbrokers—have at times defaulted on obligations. The persistence of these scams is less about investor ignorance or greed and more about a lack of accountability. Regulatory bodies like the Securities and Exchange Commission (SEC) often fail to enforce consequences, enabling fraudulent practices to persist unchecked.

I speak from personal experience. I am a victim—not due to greed or poor judgment—but because the distinction between legitimate and fraudulent investments in Nigeria has become dangerously blurred. As an advocate for financial planning, I have diversified investments across insurance, stocks, and bonds, only to suffer repeated disappointments.

Three years ago, I publicly detailed my ordeal with Industrial and General Insurance (IGI) in a piece titled “Industrial and General Insurance Plc. as a Ponzi Scheme.” I highlighted how an insurance company that fails to honor matured policies functions no differently from a pyramid scheme. Though I was eventually paid, it was only after public pressure and with significant shortfalls—while many IGI clients still await resolution.

Now, I find myself entangled in another financial debacle—this time with Cashcraft Asset Management Limited.

Cashcraft, once a registered broker and fund manager under the Nigerian Stock Exchange and SEC, was incorporated in 1991 with a declared share capital of ₦3 billion and visible operations nationwide. The firm marketed itself as a top-tier asset manager with products like the Personal Earning Annuity Scheme (PEAS), aimed at self-employed and salaried individuals seeking secure retirement options.

In 2006, I invested ₦500,000 in a 15-year PEAS plan, expecting a return of ₦6.2 million by September 2021. In 2016, I committed another ₦3 million under the PEAS Education Plan for my children, due in 2026. Upon maturity of the first plan, Cashcraft failed to honor its commitment. Appeals to the SEC yielded no actionable response. My legal counsel issued formal demands for both repayment and early termination of the education plan. Yet, as of today, Cashcraft has effectively vanished.

In September 2024, a coalition of defrauded investors petitioned the National Assembly, seeking recovery of over ₦8 billion lost to Cashcraft. The petition, sponsored by Hon. Obiageli Lilian Orogbu of Awka North/South Federal Constituency, remains unaddressed. Over 9,000 Nigerians—myself included—remain without justice, even as those behind the scheme enjoy ill-gotten wealth.

As Hon. Orogbu emphasized, Cashcraft was a licensed, regulated entity. Investors were not uneducated gamblers; they were misled by a company operating under legal protections. Therefore, the Nigerian government bears responsibility for ensuring restitution.

The recent amendment of the Investment and Securities Act (ISA) 2025, signed into law by President Bola Tinubu, is a promising development. It strengthens investor protection, expands SEC oversight, and criminalizes Ponzi operations with up to 10 years of imprisonment.

However, legislation alone cannot resolve this crisis. The real challenge lies in enforcement. While the EFCC has promised CBEX investors a recovery process, a similar commitment is urgently needed for Cashcraft victims. Both companies—CBEX and Cashcraft—represent the same threat: financial predators exploiting systemic regulatory failures. The Nigerian state must ensure that those responsible are held accountable, and victims are not abandoned to suffer in silence.