*Commission Traces Funds To Four Countries
INSPITE of alleged N1.2trillion digital trading fraud that negatively impacted over 600,000 Nigerians, more citizens and investors still patronise the embattled Crypto Bridge Exchange (CBEX) trading platform involved in the the acts, as it resumed operations, announcing fresh withdrawal options in a bid to restore investor confidence.
This is despite a ban on its activities/operations in the country by the Securities and Exchange Commission (SEC) and ongoing investigation of he fraud allegations involving it by the Economic and Financial Crimes Commission (EFCC).
Indeed, two traders on the CBEX platform told The Punch that the firm had quietly resumed operations, allowing new users to register, trade and withdraw profits, irrespective of the ongoing probe by regulatory agencies, who have commenced insurance verification process and external audit of the its financial records to ascertain the actual amount lost following the collapse of the scheme in April this year.
Existing investors, many of whom have been unable to access their funds for weeks, would be able to access and withdraw their funds from June 25, when the audit is expected to have been concluded by a United Kingdom (UK) based insurance firm.
This came weeks after the Securities and Exchange Commission (SEC) declared CBEX illegal, even as the Economic and Financial Crimes Commission (EFCC) probes its operations.
CBEX, at its boom, offered investors 100 per cent profit after 30 days of purported AI trading. It commenced operations in Nigeria last year after receiving registration approval from the Corporate Affairs Commission (CAC) on September 25, 2024, and the EFCC’s Special Control Unit Against Money Laundering on January 16, this year.
Worried by its collapse on April 14, EFCC declared eight persons- Johnson Oteno, Israel Mbaluka, Joseph Michiro, Serah Michiro, Adefowora Olanipekun, Adefowora Oluwanisola, Emmanuel Uko, and Seyi Oloyede- wanted for promoting the schme.
On Monday, April 28, Adefowora Abiodun, a prominent leader and trader on the platform, voluntarily surrendered himself to the agency for interrogation.
Meanwhile, the agency said it has traced proceeds from the scheme to at least four countries, lamenting that full restitution to victims may be impossible.
Its Chairman, Mr. Ola Olukoyede, stated this while speaking on a television programme on Wednesday, saying the agency had frozen a number of accounts linked to the scheme and made significant progress in ongoing investigations, adding: “We have been able to block some accounts. We have been able to freeze some funds, which I will not be able to give you a figure, but some reasonable amount of funds, we have been able to freeze.”
He said a majority of the transactions were conducted in cryptocurrency and routed through wallets outside Nigeria’s jurisdiction, complicating recovery efforts, noting: “I will not sit down and tell you that we are going to restore every victim. It will become practically impossible because quite a certain amount of money has been dissipated and not within our system.
“We have traced to three, four countries now. In fact, the principal parties behind the entire scheme… most of them are foreigners.”
While acknowledging collaboration with foreign counterparts to recover stolen funds and apprehend more suspects, the EFCC boss said three suspects were already in its custody and have provided “very useful statements.”
The SEC also frowned at the operations of the suspected Ponzi scheme, warning Nigerians to exercise extreme caution and steer clear of investment platforms that offer unrealistic returns under the guise of digital trading.
However, more Nigerians were still being lured by promises of quick profits, with new users flocking to the platform hoping to cash in on its resumed operations.
It was gathered that withdrawal options on the CBEX platform had been reactivated, and while new accounts could process withdrawals, funds from older accounts remained inaccessible, even as the platform strives to clear itself of any allegations of fraud or any association as a Ponzi scheme.
An inside source told The Punch: “People can now withdraw from the CBEX platform; the withdrawal option has been activated. Let me explain the withdrawal. The old account was wiped; you can’t take out funds from it yet.
“On the 14th of this month, the Artificial Intelligence (AI) on the platform traded 100 per cent, lost its trade and wiped people’s money out.
“But now, the promoters are saying that the platform and the CBEX application are insured, with verification of funds ongoing by the insurance company.
“Previous investors who have $1,000 as their capital would have to inject $100 and the former account balance would be restored, while persons with over $1,000 would have to put in $200 to bring back the account balance.
“We have started seeing people put in these funds to get back their money and are using it to trade now, as I talk to you.
“According to the latest information shared, previous investors can only trade, but not withdraw because the United Kingdom Government is carrying out an audit on their financial account, which will be completed between 30 to 60 days; hence previous investors cannot withdraw their funds yet.
“But from June 25th, you can now withdraw up to 50 per cent of your capital from the old account. For example, if you invested $1,000 and you could only withdraw $200 before, from the 25th, you can withdraw $400 from the remaining $800 capital, then from August 25th, you can withdraw the remaining $400 capital.
“But if you don’t do the verification, it won’t reflect in your account.”
Another source explained that fresh investors are currently able to register new accounts, fund them and withdraw profits without restrictions, as the newly created accounts are not subject to ongoing audits; only the old accounts remain under financial review.
The promoters also refuted allegations of fraud, insisting that funds remained intact and ongoing audit was focused on reconciling discrepancies in old accounts.
The source added: “What they are auditing is because the Federal Government said they scammed Nigerians of N1.2trillion, and they are insisting that the amount is not up to half of the publicised amount. They are claiming only N126billion was lost, and that is the reason for the audit.
“But new accounts can now start investing and get their money. There is also a bonus for referrals that you can withdraw immediately, and this is ongoing currently.
“They just want to prove to Nigerians that they are not scammers. It was just because AI traded 100 per cent of the funds that the money was lost. There is a new group where people can say whatever they want to say; they also drop signals for trading three times a day, but it is no longer automated; you have to do it by yourself.
“They would give you a code you just have to put in your account and trade. If you notice any abnormality, you can cancel it. That was how it was before AI started doing the trading.”
When questioned on why the audit was not conducted by the Nigerian government, the source explained: “The firm is registered in the United Kingdom, not in Nigeria; they merely extended their operations here. In fact, they also have branches in Kenya, South Africa and Egypt.”
Further investigation showed that EFCC has declared a foreign national, Elie Bitar, wanted for his alleged role in a cryptocurrency investment fraud linked to CBEX.
In a bulletin released on Wednesday, April 30, via its official social media platforms, EFCC urged anyone with useful information about Bitar’s whereabouts to contact any of its offices nationwide or reach out through its hotlines and email, giving his last known address as Engineer George Enemoh Crescent, Lekki Phase 1, Lagos.
Meanwhile, the Nigerian Financial Intelligence Unit (NFIU) has cautioned Nigerians against engaging in unregulated digital asset investment platforms, many of which exhibit traits of Ponzi and pyramid schemes.
In an advisory released on Wednesday, the NFIU flagged multiple online platforms, including eWealth Connect, WWCoin (also known as TOFRO), Delux, and ADK, as posing significant financial risks due to lack of regulatory oversight, unrealistic profit promises and deceptive marketing tactics.
It described ADK, an investment and betting platform, as dangerous to invest in due to its deceptive profit claims, multi-level agent system and predatory practices in jurisdictions with limited investor protection.
NFIU stated: “ADK is a high-risk investment and betting platform that profits through a nine per cent withdrawal fee and investor losses, particularly targeting users in regions without compensation agreements.
“It operates with a multi-level agent system (e.g Junior/Gold Agents), where earnings depend on recruitment and trading losses, while advertising a deceptive 97 per cent win rate that hides low-profit margins.
“With its reliance on unsustainable recruitment rewards and selection, ADK exhibits strong red flags of a potential Ponzi scheme or scam, making it a dangerous platform for investors.”
The advisory also said EWC was identified as a community-driven trading platform launching on the Solana blockchain, offering daily P2P auctions and tiered investment packages.
It explained: “eWealth Connect is a decentralised, community-driven platform built on the Solana blockchain, designed to revolutionise digital asset trading through peer-to-peer (P2P) auctions.
“Launching in Q4 2024, it offers features like dual daily trading sessions, transparent pricing and real-time settlements, with a focus on emerging markets like Nigeria.
“The platform’s native EWC token provides utility, such as reduced fees, governance rights and exclusive trading benefits. EWC emphasises community empowerment, allowing users to participate in platform development and governance while offering tiered investment packages with projected returns.
“Despite its ambitious roadmap, including international expansion and NFT integration, the platform’s sustainability and regulatory compliance remain to be tested, warranting cautious evaluation by potential users.”
Inspite of its innovative design and roadmap, the NFIU cautioned that its regulatory compliance remains untested, warning Nigerians, especially students, freelancers and content creators, among others, about Delux, a platform designed to help users to monetise their activities online.
“Delux is a platform designed to help users monetise their online activities, particularly through social media engagement (like TikTok), content creation and completing daily tasks.
“It promotes financial freedom by offering flexible earning opportunities, such as referral rewards, task-based income and content monetisation, with an emphasis on simplicity and accessibility.
“While it targets students, freelancers and creators, users should verify its legitimacy, payment proofs and terms to ensure it’s not a pyramid scheme or scam. Always research before investing time or money.”
NFIU flagged WWCoin (TOFRO) as exhibiting “classic Ponzi characteristics with its unrealistic daily returns of up to six per cent, alongside aggressive deposit incentives and high withdrawal fees.
According to it: “WWCoin (aka TOFRO) is a newly launched trading platform (as of October 2024) that offers daily trading signals, deposit bonuses and promises high returns (1 per cent profit per signal, totaling six per cent daily).
“Key features include a minimum deposit of $100, withdrawal fees (20 per cent before doubling funds, 10 per cent after) and extra signals for larger deposits.
“However, the platform raises significant red flags, such as unrealistic profit claims, high withdrawal fees, lack of regulatory transparency and aggressive deposit incentives, all common traits of Ponzi schemes or high-risk scams.”
The advisory highlighted common red flags Nigerians should watch out for, including guaranteed high returns with zero risk and absence of regulatory approval or licensing.
“Unrealistic or guaranteed returns, promises of fixed daily, weekly or monthly ROI, e.g., ‘five per cent daily for life’ or ’15 per cent or more monthly return,’ and claims like ‘your money works for you 24/7 with zero risk.’
“It is suspicious because legitimate investments tied to market performance cannot guarantee consistent high returns, especially with crypto volatility.”
The advisory warned against schemes whose revenue depends on referrals rather than product or service delivery, noting: “Overemphasis on referrals and affiliates: Income is primarily earned from recruiting new investors, not from actual product or trading activity and referral bonuses or commissions for every new investor brought in.
“Classic pyramid and Ponzi structures rely on continuous recruitment to fund payouts, use of newly created or unknown tokens. Platform issues its own token (e.g., “XToken” or “Pinkoin”) with no market value or external exchange listing and promotes speculative token value without utility or governance model. Many Ponzi schemes mint fake tokens to simulate value and lure victims.
“Fake partnerships and credentials: False claims of affiliations with international organisations like the United Nations (UN), World Bank, Binance, Coinbase, etc. Fabricated endorsements by celebrities or government officials.”
It added: “Opaque Business Model: Vague explanations of how profits are generated e.g., ‘AI-driven crypto trading’ or “’uantum blockchain technology’ with no evidence). No whitepaper, audited financials or identifiable fund managers. It is a red flag because transparency is a hallmark of legitimate financial operations.
“Pressure to Act Quickly: Limited-time offers, countdown clocks or ‘investment windows’ that push urgency. Fear-of-missing-out (FOMO) tactics, like ‘top 100 users get double ROI.’ This discourages due diligence and encourages impulse investment.”
NFIU urged investors to conduct due diligence, consult licensed financial advisers and report suspicious platforms to relevant authorities.
Also, Director General of SEC, Dr. Emomotimi Agama, warned Nigerians that registration with CAC and Special Control Unit Against Money Laundering under EFCC does not confer legitimacy on any investment scheme operating in the country.
Speaking during a sensitisation tour against Ponzi schemes at the Garki Market in Abuja, Agama said: “CAC registration and EFCC certificate is not enough to show that a company is registered with SEC. These are red flags Nigerians must look out for.”
He stated that several companies, both Nigerian and foreign, have taken advantage of Nigerians by luring them into unregistered investment schemes, vowing that government would not sit back and allow billions of naira to be lost to such operations.
“It is disheartening that some Nigerians and foreign companies have specialised in duping people. Government won’t sit and watch Nigerians being defrauded.
“That is why the SEC is coming out to educate the people. If it’s too good to be true, then it is likely fraudulent,” Agama said.
He explained that the Investments and Securities Act recently signed into law provides a N20million fine and a 10-year jail term for those involved in Ponzi schemes and gives the Commission stronger enforcement powers to tackle illegal investment operations.
The SEC boss advised Nigerians to always verify the registration status of any investment platform with the SEC before committing their money, warning that training programmes used to lure people into such schemes are also illegal.
Recall that a Federal High Court in Abuja recently granted EFCC permission to arrest and detain six CBEX promoters in connection with the investment fraud allegation.
Justice Emeka Nwite issued the ruling after the Commission’s legal representative, Fadila Yusuf, submitted an ex parte application seeking judicial approval for the detentions.
