CBEX Wealth Chasers, NDIC And The Fate of Depositors

By Reuben Abati

I was abroad when the CBEX scandal broke: somehow, I tend to be out of town when Nigerians get into very serious trouble but it has been my singular misfortune, and this has happened so many times for close to four decades, to discuss other people’s misfortune. Occupational hazard, I guess. The choice I have made. The job that I do- worrying about community headache, including other people’s self-inflicted migraine for which my job requires me to take analgesics on other people’s behalf. The story as told is that a group of con artists operating under the auspices of a group registered with the Corporate Affairs Commission (CAC) as ST Technologies International Limited, even listed with the Economic and Financial Crimes Commission’s Special Control Unit Against Money Laundering had set up fancy offices in Lagos and Ibadan, recruited staff, and asked Nigerians to bring money and get 100% returns on investment in 30 days. Nigerians rushed to CBEX, that is Crypto Bridge Exchange. They talked about the beautiful offices and the certificates of registration that they saw. They invested money, which as at the last estimate stood at N1.3 trillion. Even when they were warned in April 2024 by Hong Kong financial authorities that CBEX was a Ponzi scheme, a fraudulent financial arrangement, Nigerian investors and the regulators failed to heed the warning. They took their money to CBEX. One morning, the CBEX system stopped working. The investors and depositors could not gain access to their investments. Over N1.3 trillion was lost. The fancy offices of CBEX suddenly shut down and the managers disappeared into thin air.

The Economic and Financial Crimes Commission (EFCC) has now declared about eight of the CBEX managers wanted. They are reportedly on the run, of course with their loot. The fact that this has happened under the watch of the security agencies, and the regulators, specifically the Securities and Exchange Commission (SEC), whose officials failed to do due diligence and placed Nigerians at risk is scandalous enough. It speaks to the failure of law enforcement, regulation and institutions in Nigeria. 

But the deeper issue is the greed and poverty of the average Nigerian. Our people are so poor that they would do anything to make the extra buck. The menace of rape, kidnapping and ritual killings has been linked for example to the shamanist belief that you can become rich overnight by using harvested human body parts. Traditional spell-binders deceive those who want to get rich quick with that story and there have been killings in the land. Prosperity pastors tell the congregation that the church is not for the poor, and that even our Lord Jesus Christ had no serious interest in the poor. These same prosperity pastors in Nigeria have not said much about the Catholic Pontiff, Franciscus, who was buried over the weekend and who was known for his simplicity, humility, and commitment to the values of peace, equality, justice, and inclusion. Once upon a time in Nigeria, ordinary people questioned the source of anybody’s wealth, but now, you just must be rich to be considered a citizen who deserves the community’s attention. The emergent nouveaux riche class in Nigeria may not have an evident means of income, they spend money for a living, they marry the most beautiful girls in town, and they are better secured than the Nigerian state itself.  It is this collapse of everything sane and sensible that has driven the average Nigerian to the embrace of CBEX and similar schemes.  Wealth by any means possible is Nigeria’s national ethic codified in the reign of 419 as it is called, and the triumph of laziness and ostentation.

There is also something tragically wrong with public memory.  In the 1980s, a certain fellow – Umanah Umanah introduced a Ponzi scheme called MMM. By 2016, MMM crashed after the managers had stolen over N18 billion. The people cried and protested as they are doing now. But by 2022, another Ponzi scheme, MBA Forex had again swindled the people of amounts close to N213 billion. The story is the same. People weep. A few persons commit suicide. Everyone laments, but when another Ponzi scheme shows up, the same fortune chasers of Nigeria, who would rather gamble than work harder and be honest. They would look for quick, unreasonable profit, and they would get swindled again. The IMF/World Bank at the end of the recent Spring Meetings in Washington DC warned that poverty is bound to get worse in Nigeria by 2027 – 57% of the population would live below the poverty line. The tragedy of this, already well lamented by NACCIMA and the Manufacturers Association of Nigeria (MAN) is that more Nigerians would become desperate, seek unorthodox means of getting rich, and gamble away their lives. This is why I think that public advocacy is important: to let young persons who appear to be the most vulnerable know that there are no short, overnight cuts to success or financial gain.