The recent collapse of CBEX—Crypto Bridge Exchange—has once again drawn national attention to the vulnerability of Nigerian investors to fraudulent investment schemes. The crash, which reportedly led to losses exceeding ₦1.3 trillion, is the latest in a series of similar events that include MMM, Racksterli, and Baraza.

CBEX operated as a cryptocurrency investment platform, promising high returns and guaranteed payouts. It established physical offices in several Nigerian cities and promoted itself using foreign “advisers” and claims of approval from the Securities and Exchange Commission (SEC), which have now proven to be false.

One affected investor, Samuel, a civil servant based in Calabar, said he invested ₦180,000—money meant for his daughter’s tuition and his yearly savings. “They said the returns were automated, that I’d get my principal with the profit in phases. Now I can’t even log in,” he said.

Investment analyst and Managing Partner at NestCap Financial Advisory, Uche Ogbonna, said many of the collapsed platforms shared common features. “CEBEX and others like it prey on hope. But hope, when untethered from knowledge, becomes a trap,” he said.

Ogbonna explained that many of these schemes follow the pattern of pyramid systems. “They use funds from new investors to pay the earlier ones, giving an illusion of profitability until the bubble bursts,” he noted. He added that promises of fixed, high weekly returns—especially those above 10%—should be viewed with suspicion. “No regulated instrument or legitimate business can sustain such returns consistently. It defies market logic. If you cannot understand how the money is being made, or if the business model is opaque, walk away.”

Bolanle Ajayi, CEO of Lagos-based financial education platform SmartInvestor Africa, pointed to the rapid emergence and disappearance of such platforms. “They are tech-savvy, use social media to build hype, and rely on trust-based marketing. Before regulators can even act, millions are already lost,” she said.

She also highlighted the role of influencers and public figures in lending credibility to dubious platforms. “Too many public figures endorse these platforms without due diligence. If you have the power to influence, you also bear responsibility for the outcomes,” she added.

Temitope George Ijibadejo, African Regional Director at SquaredFinancials, said the appeal of these schemes is not necessarily a result of naivety. “People don’t just fall for scams because they’re naive. It’s often a mix of poor financial literacy, social pressure, and a toxic optimism that stems from economic despair.”

Ijibadejo explained that perpetrators often use friends or family members who received early profits to attract others. “Most Ponzi models are cleverly designed to reward the first set of joiners. So when they show off their gains, others jump out of FOMO — the fear of missing out.”

He described CBEX’s strategy as particularly difficult to trace due to its use of cryptocurrency. “They used crypto—which lots of Nigerians don’t get yet—to trick people with talk about decentralisation, AI trading, and blockchain guarantees. But the red flags were all over the place.”

On how investors can protect themselves, Ijibadejo provided several markers, which include, “Regulatory Approval: If a company says they offer financial services, they have to be legitimately registered with the SEC or CBN. Nigerians can check on the SEC site. CBEX had no license.

“Unrealistic Returns: If they’re promising over 15-20% return a month with no risk, that’s just not possible. If it sounds fake, it is fake.

“Opaque Processes: When their processes are not clear or transparent, especially when designed with trendy words but no logic, please leave.”

“Unknown Ownership: If your investment platform has concealed or shady ownership, where you can find very little of what they have done, please leave.”

Ijibadejo also commented on the performance of Nigerian regulators. “The SEC didn’t issue warnings in the CBEX case until thousands of people had already lost their money. They appear to have learnt from that experience, though, and are now more watchful.”

He proposed a long-term approach to addressing the problem. “The solution is a national financial education strategy, particularly among secondary school students, local councils and faith-based groups. Economic intelligence is survival intelligence now. Without it, we’re going to keep getting hurt.”

Ijibadejo advised Nigerians to avoid quick returns and focus on building long-term financial literacy. “The true road to riches is not in quick fixes. It’s in patience, in doing your due diligence and in diversifying your holdings—from mutual funds to real estate. It’s also very beneficial to learn these investment options by oneself, to understand and navigate them independently.”

Although investigations into CBEX are ongoing, many affected investors have little hope of recovery. For some, the damage includes the loss of homes, broken trust, and postponed life goals.

“The fact is, until Nigerians as a people have a consensus of what knowledge is above noise and hype, and what verification is above urgency, the scam cycle will remain a vicious circle,” Ijibadejo said. “It’s a painful lesson, but one we have to learn.”