Lagos, Nigeria— For Mandela Fadahunsi, a 26-year-old staffer at a technical school in Ikeja, April 6 began like any other. But a WhatsApp message from a fellow investor in the cryptocurrency platform Crypto Bridge Exchange (CBEX) changed everything. Someone had tried to withdraw funds but failed. Alarmed, Fadahunsi attempted to take out his 500 USDT—roughly $325—but the transaction never went through.
“I knew something had gone wrong,” he said. “They said it was due to the excessive volume of people trying to withdraw.” The CBEX administrators promised resolution by April 15. That date came and went with no updates. Soon after, the website vanished, and with it, an estimated 4,596 USDT from Fadahunsi’s digital wallet.
Like Fadahunsi, thousands of Nigerians fell victim to what authorities have now confirmed was a Ponzi scheme disguised as a high-yield crypto investment platform. CBEX promised up to 100% returns in just over a month, powered by alleged artificial intelligence that could trade profitably on users’ behalf. By the time it collapsed nine months after its July 2024 launch, it had swallowed 1.3 trillion naira ($840 million), according to the Nigerian Financial Intelligence Unit (NFIU).
‘I Invested in a Ponzi Scheme.’
The collapse was swift and devastating. In cities like Ibadan and Lagos, outraged investors stormed CBEX offices. On social media, despair and ridicule poured out in equal measure. The Economic and Financial Crimes Commission (EFCC) swiftly labelled CBEX a Ponzi scheme and began arrests.
“I am not proud of opening my mouth [to say] that I actually invested in a Ponzi scheme,” Fadahunsi admitted. “If I wasn’t greedy, I should have been able to withdraw two to three times on the platform.”
CBEX’s method was slick. Investors received “signals”—codes to be pasted into their portal—which supposedly triggered AI-powered trades. The early returns felt real. “In a month, I got double 500 USDT,” Fadahunsi said. Eventually, manual input was replaced with an “AI hosting” feature. But it was all a ruse to maintain investor confidence before the exit.
The Psychology of Easy Money
Experts say CBEX succeeded by exploiting a perfect storm: widespread economic hardship, financial illiteracy, and desperation. According to the Central Bank of Nigeria, 38% of Nigerians are financially illiterate. That, coupled with an inflation rate of 23.71%, leaves many citizens vulnerable.
“People knowingly take part, hoping to cash out before the fall,” said Joachim MacEbong, a senior analyst at Stears, a Lagos-based financial advisory firm. “There is a lot of hardship. This kind of hardship increases people’s desire to take risks and gamble with their very important funds.”
Ponzi schemes like CBEX rarely have real business models. “Most of them don’t have anything to sell,” said Ikemesit Effiong of SBM Intelligence. “Even the agriculture-based ones claim to have products that investigators are unable to track.”
Trapped by Hype and Hopes
Waris Oyedele, 25, had dreams of paying for his brother’s education. After investing his savings of 800,000 naira into CBEX in January, he watched it grow to 1,200 USDT by March. But when everything collapsed, so did his plans.
“I had a plan of buying a computer and going into UI/UX,” Oyedele said. “Now it has gone.”
The scheme, like many others, built trust through visibility—sponsoring sports events and offering scholarships to children. Influencers and even Afrobeats stars had unknowingly endorsed similar schemes in the past.
“The obvious fear of missing out is what drives people,” Effiong noted. “All of that is to prey on the psychology of potential investors to not slow down.”
A Call for Education and Reform
In May, the EFCC announced it had recovered some of the stolen funds and arrested two CBEX promoters. But for many victims, hope is thin.
“Whatsoever the authorities retrieve, I am sure that nothing is going to come to me,” Fadahunsi said. “That is a very tough lesson for me. [Now,] I would rather keep my money in my account and spend it till the last dime.”
Authorities are warning the public to remain vigilant. In March, the EFCC released a list of 58 Ponzi schemes currently active in Nigeria. The Securities and Exchange Commission (SEC) urged citizens to verify investment firms before committing funds.
Effiong concluded, “If it sounds too good to be true, chances are it is too good to be true.”
As Nigeria battles its deepest economic slump in decades, stories like Fadahunsi’s serve as a cautionary tale: in a country searching for quick relief, the promise of instant wealth may come at a devastating price.
