CBEX: EFCC Releases Key Signs Investment Opportunity Is a Ponzi Scheme

• EFCC has released a list of red flags that the public should be aware of when making investments following the collapse of CBEX
• The commission, among several key points, noted that any investments with high return promises should be investigated
• Citizens are advised to verify all investment opportunities with regulatory bodies like the SEC to avoid falling victim

Dave Ibemere, a journalist at Legit.ng, has been reporting on business for over ten years. He has deep knowledge of the Nigerian economy, stock market, and general market trends.

The Economic and Financial Crimes Commission (EFCC) has issued a fresh warning to Nigerians following the collapse of CBEX, a suspected Ponzi scheme that left scores of investors reeling from losses.

In its weekly public engagement series, #EFCCConnect, held on Wednesday, April 30, the commission titled its latest episode "Promises to Tears: The Story of Ponzi Schemes", aiming to educate citizens on the dangers of fraudulent investment schemes and how to identify them.

In a statement released on X, EFCC said the discussion follows a series of distressing events arising from the fall of fast fast-rising Ponzi scheme, CBEX.

The EFCC explained:

“"Ponzi schemes defined: A ponzi scheme is a business or investment initiative that thrives on the recycling of funds from one investor to another, usually with unrealistic promise of returns on investment.

"It is a business model that does not follow the normal template of businesses we know across the world."

Signs of an investment opportunity is a Ponzi scheme

The EFCC outlined key red flags that signal a potential Ponzi scheme:

Promise of high returns and low risk:

When a business promises unrealistically high returns in a short period, it may be a sign to investigate further.

Lack of information on promoters:

A business arrangement that does not provide clear information or profiles of its promoters is one you should avoid investing in.

Unknown or questionable profile of the business:

What is the business all about? Where else has it been implemented successfully? For previous investors, how did it turn out?

The Commission urged the public to exercise caution and verify investment opportunities with regulatory bodies such as the Securities and Exchange Commission (SEC) before committing funds.

EFCC to track fraudsters

The EFCC has consistently reiterated its commitment to tracking down promoters of fraudulent investment schemes and recovering stolen funds where possible.

Recently, the commission declared some promoters of CBEX wanted and promised to recover the funds stolen from Nigerians.

The Economic and Financial Crimes Commission says it has traced funds linked to the failed crypto bridge exchange scheme to at least four countries.

Speaking on Politics Today, a Channels Television programme, Ola Olukoyede, EFCC chairman, said that although efforts are underway to recover the stolen funds, full restitution to victims may be impossible.

Olukoyede said several accounts have been blocked and funds frozen, although the amounts cannot be disclosed yet.

He said most of the transactions were conducted in cryptocurrency and routed through wallets beyond Nigeria’s jurisdiction.

SEC issues warning to Nigerians

Earlier, Legit.ng reported that the SEC has sent a warning to Nigerians about TOFRO.COM, an unlicensed platform luring investors with fake promises.

The commission said the platform claims to be a cryptocurrency investment platform, but noted that it is a Ponzi scheme.

SEC has urged Nigerians to verify investment platforms before jumping into them to avoid costly scams.

Source: Legit.ng