Nigeria’s strong appetite for investment is undeniable. From bustling urban centers to rural communities, opportunities to grow wealth are eagerly sought. Unfortunately, this enthusiasm has also made the country a fertile ground for digital investment scams, particularly Ponzi and pyramid schemes that disguise themselves as legitimate opportunities.
The Economic and Financial Crimes Commission (EFCC) has repeatedly warned citizens to steer clear of Ponzi schemes, stressing that such operations promise unrealistic returns without any viable business model. In a recent statement, the EFCC pointed out that no credible investment platform guarantees consistent profits, especially in volatile markets like
cryptocurrencies. Yet, despite these warnings, Nigerians continue to pour billions of naira into schemes that collapse within months, leaving devastating financial losses.
A recent advisory by the Nigerian Financial Intelligence Unit’s (NFIU) offers insights into why these scams thrive. First, the country’s rapid adoption of digital assets has created both opportunities and vulnerabilities. Nigeria leads Africa in cryptocurrency adoption, receiving over $59 billion worth of crypto between July 2023 and June 2024, according to Chainalysis. This growth has drawn legitimate businesses—but also sophisticated fraudsters who exploit public
excitement and limited understanding of digital finance. Case studies in the advisory show how devastating these schemes can be. The Mavrodi Mondial Moneybag, popular in the 2010s in Nigeria, promised a staggering 100% return within days, luring thousands of investors before collapsing. Losses were estimated at over ₦4.8 trillion.
Another scheme projected an image of religious values, philanthropy, and youth empowerment while offering monthly returns of 3–4%. It used social media endorsements and crypto channels to attract investors in Nigeria and abroad before defaulting, reportedly costing victims over ₦10 billion. Part of the problem lies in the tactics these fraudsters use. They blend financial jargon with trending technologies, artificial intelligence, blockchain, decentralised finance, making their offerings sound both cutting-edge and exclusive. They pressure people to invest quickly, offer bonuses for referrals, and flaunt endorsements from influencers. Operations often run primarily on social media platforms like WhatsApp, Telegram, and Instagram, bypassing regulatory scrutiny.
But why are Nigerians so susceptible? Economic hardship is a major factor. With unemployment and underemployment affecting millions, the promise of quick, high returns is hard to resist. Greed and “get-rich-quick” mentalities compound this problem. Desperation often overrides caution, leading people to ignore red flags and regulatory advice.
Cultural trust networks also play a role. Many schemes spread through personal recommendations, friends, church members, colleagues, making them appear credible. Once early participants receive payouts (funded by later investors), they become unwitting ambassadors, drawing in more victims. Weak enforcement and public awareness gaps also contribute. While the Investment and Securities Act 2025 now gives the Securities and Exchange Commission (SEC) explicit oversight of digital assets and stiffer penalties for promoting Ponzi schemes—including fines of at least ₦20 million or 10 years in prison, regulators often act after schemes have already collapsed. Fraudsters exploit this enforcement lag, rebranding and relaunching under new names.
The global nature of digital scams further complicates matters. Blockchain’s pseudonymity allows operators to move funds across borders quickly. Privacy coins, crypto mixers, and decentralised exchanges make tracing transactions difficult. Even when platforms are flagged locally, their websites and social media channels may still target Nigerians from offshore jurisdictions.
However, there are ways forward. The NFIU and EFCC have urged citizens to always verify if an investment company is registered with the SEC, avoid platforms promising unrealistic returns, and report suspicious activity. They recommend a centralized public database of licensed investment firms, stronger regulation of Virtual Asset Service Providers (VASPs), and public fraud alert portals.
For financial institutions and payment processors, the advisory emphasises tighter Know-Your-Customer (KYC) procedures, transaction monitoring for unusual patterns, and refusing to process payments to unregistered platforms. Most importantly, public education must move beyond occasional press statements. Sustained, community-level campaigns, delivered in local languages and through trusted institutions are needed to explain how these schemes work, why they fail, and how to spot them early.
The fight against digital investment scams in Nigeria is ultimately a fight for financial literacy, regulatory efficiency, and public trust. As long as economic pressures remain high and digital finance evolves faster than consumer understanding, scammers will find fertile ground. The choice before Nigerians is stark: invest time in due diligence or risk investing savings in the next elaborate illusion.
Wale Williams is the Chief Information and Technology Officer at Union Bank
