The Ponzi Playbook: What Every Nigerian Investor Needs to Know

Recently, the CBEX trading platform trended across Nigeria for all the wrong reasons. Thousands of people lost money to what appears to be another Ponzi scheme disguised as an investment opportunity. But CBEX is only the latest in a long list of fraudulent platforms that promise riches and deliver heartbreak.

So, how do you protect yourself and your loved ones?

The first step is knowing what to look out for:

What Is a Ponzi Scheme? A Ponzi scheme is a fraudulent investment scam where returns are paid to earlier investors using the capital from newer investors. There’s no real business or profit—just a cycle of robbing Peter to pay Paul. When new investments slow down, the scheme collapses.

How to Spot a Ponzi Scheme:

1. Unrealistic Returns: If a platform promises you 100% returns every month, run. Real investments grow over time, not overnight.
2. No Clear Business Model: Ask: How is the company making money? If the only revenue seems to come from recruiting new members, it’s a scam.
3. Pressure to Refer Others: Ponzi schemes often rely on referrals. The more people you bring in, the more you “earn.” That’s not investing; it’s recruiting.
4. Lack of Regulation: Is the platform registered with Nigeria’s SEC or regulated by the CBN? If not, don’t trust it with your money.
5. No Transparency: If you can’t find clear, verifiable information about the company’s founders, location, or legal documents, it’s a red flag.
6. Delayed Withdrawals or Account Freezing: Many scammers delay or block withdrawals as the scheme begins to fall apart. That’s a sign your money is at risk.
7. “Too Good to Be True” Testimonials: Watch out for scripted testimonials and paid influencers pushing platforms that seem suspicious.

How to Protect Yourself:

• Do Your Research: Search the platform’s name along with the word “scam.” Check reviews, watchdog sites, and regulatory bodies.
• Verify Licenses: Confirm with the Securities and Exchange Commission (SEC) or Central Bank of Nigeria (CBN) that the company is legitimate.
• Be Skeptical of Crypto or Forex “Trading” Platforms: Many Ponzi schemes now claim to use complex tools like AI, crypto, or forex to mask their fraudulent activities.
• Talk to a Financial Advisor: Before investing large sums, consult a licensed financial advisor, not your neighbor or a social media influencer.
• Avoid Investing Through Social Media DMs or WhatsApp Groups: If someone messages you out of the blue with an “opportunity,” it’s likely a trap.

When it comes to money, there are no shortcuts. If an investment sounds too good to be true, it probably is. Always ask questions, do your homework, and never invest money you can’t afford to lose, no matter how enticing the offer may seem.

Remember: Fraud thrives on ignorance. Share this post and help someone stay safe.