Nigerian Senate Orders Probe into Ponzi Scheme Operations Amid Growing Financial Scams
The Nigerian Senate has officially directed its Joint Committees on Capital Market; Banking, Insurance and Other Financial Institutions; Anti-Corruption and Financial Crimes; and ICT & Cybercrime to carry out a comprehensive investigation into the activities of Ponzi schemes operating within the country.
This resolution came after the adoption of a motion titled “Investigative Hearing into the Operations of Ponzi Schemes in Nigeria, with Particular Reference to the Recent Crypto Bullion Exchange (CBEX) Incident”, which was sponsored by Senator Abiru Adetokunbo (Lagos East) and co-sponsored by Senator Osita Izunaso (Imo West).
The Nigerian Senate expressed deep concern over the rapid spread and alarming rise of unregulated and fraudulent investment operations — commonly referred to as Ponzi or pyramid schemes such as MMM Nigeria in 2016 and MBA Forex in 2020, which have repeatedly defrauded millions of Nigerians. The Senate noted that these scams have led to severe financial hardship for victims, in some cases resulting in depression, family breakdowns, and even suicides.
Of particular note was the recent case involving Crypto Bullion Exchange (CBEX), a digital investment platform that reportedly enticed millions of Nigerians with promises of outrageous returns, only to collapse abruptly. This collapse led to losses exceeding N1.3 trillion (about $847 million), marking it as one of the most devastating financial scams in Nigeria’s history.
The Nigerian Senate further observed that the CBEX case was not an isolated event but part of an increasing trend of unregulated, fraudulent schemes exploiting technology and social media platforms to deceive the public. These operations often employ referral commissions, celebrity endorsements, and fabricated testimonials to build credibility and recruit unsuspecting victims.
It was particularly shocking to the red chamber that, despite CBEX’s scale and visibility, it operated for a prolonged period without intervention from regulatory bodies such as the Securities and Exchange Commission (SEC), the Central Bank of Nigeria (CBN), the Nigerian Financial Intelligence Unit (NFIU), or the Economic and Financial Crimes Commission (EFCC).
During deliberations, the motion received overwhelming support from the senators. Senate Chief Whip, Senator Tahir Monguno (Borno North), lamented that people are easily tempted by offers of quick returns, making them vulnerable to such fraudulent schemes. He emphasized the responsibility of legislators to educate the public against patronizing these Ponzi operations and criticized the regulatory agencies for their failure to monitor these activities effectively.
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Senator Abdul Ningi (Bauchi Central) described the motion as “an extraordinary motion addressing an extraordinary situation that demands urgent and extraordinary action.” He pointed out that while the acts of the National Assembly have vested substantial regulatory powers in the SEC, CBN, NFIU, and EFCC, fraudulent schemes have continued to thrive in the country for over two decades despite these existing laws.
Ningi questioned, “Who are responsible for these Ponzi schemes? Why do they persist without arrests or sanctions? Ultimately, this is a collective failure on our part as a people.”
Senator Solomon Olamilekan, Chairman of the Senate Committee on Appropriations, also condemned the adverse economic impact of these Ponzi operations on the nation. He backed the call for an investigative hearing to expose those behind the scams and ensure appropriate penalties are applied to serve as a deterrent.
In his remarks, Senator Adamu Aliero (Kebbi Central) highlighted the potential negative effects of rampant financial scams on Nigeria’s investment climate, questioning how foreign investors would feel comfortable investing in an environment plagued by such corrupt practices.
Aliero acknowledged that while some blame lies with the gullibility of victims, government institutions tasked with regulating these operations must take greater responsibility by proactively preventing and halting such schemes in their early stages.
Regarding the legal case involving the government and CBEX, Senator Abiru clarified that while the government’s efforts seem focused on surface-level recovery and dealing with affected individuals, the Senate’s intention is to conduct a deep, thorough investigation to uncover the root causes and implement preventive measures to avert future occurrences.
He stressed, “What we are undertaking is a deep investigation aimed at prevention. The government may be handling the CBEX issue separately, but ours is a broader effort to understand and prevent the recurrence of such financial crimes.
