As Nigeria grapples with one of its worst economic crises in decades, many of its citizens are knowingly taking high-stakes gambles with fraudulent investment platforms in the hope of escaping poverty, only to lose everything.

A report by Al Jazeera has revealed how thousands of Nigerians were lured into a cryptocurrency-based Ponzi scheme operated by Crypto Bridge Exchange (CBEX), which collapsed in April 2025 after defrauding investors of an estimated ₦1.3 trillion (approximately $840 million).

According to Joachim MacEbong, a senior analyst at Lagos-based financial advisory firm Stears, the desperation driving such decisions is no longer rooted in ignorance alone.

“There are those who know it is a scam, but they always feel they could cash out before everybody else,” MacEbong told Al Jazeera. “This kind of hardship increases the people’s desire to take risks and gamble with their very important funds.”

Launched in July 2024, CBEX promoted itself as a crypto investment platform powered by generative artificial intelligence. The platform promised up to 100% returns within 45 days, drawing thousands of participants with referral bonuses, slick advertising, and staged community outreach like school scholarships.

For many, including 26-year-old Lagos technician Mandela Fadahunsi, the scheme appeared credible—at first.
“I also thought the money was just sitting in my account, and it could be somewhere where I can make some gains,” he said.

In February, Fadahunsi invested his rent savings—₦800,000—into CBEX. But by early April, the platform stopped processing withdrawals. Days later, its administrators vanished, the website crashed, and investors were left with nothing. Fadahunsi lost nearly 4,600 USDT (a dollar-pegged cryptocurrency).

“I am not proud of opening my mouth to say I actually invested in a Ponzi scheme,” he said. “If I weren’t greedy, I should have withdrawn two to three times.”

The Nigerian Financial Intelligence Unit (NFIU) and the Economic and Financial Crimes Commission (EFCC) have since confirmed CBEX was never licensed by the Securities and Exchange Commission (SEC). It exploited grey areas in regulation by presenting unrelated anti-money laundering certificates as proof of legitimacy.

Despite repeated warnings from financial authorities, including a March 2025 EFCC list of 58 active Ponzi schemes in Nigeria, platforms like CBEX continue to flourish, aided by aggressive marketing, celebrity endorsements, and public financial illiteracy—38% of Nigerians lack basic financial knowledge, according to a 2023 Central Bank report.

“These businesses have no real economic activity. They just recycle funds from new investors to pay earlier ones,” said Ikemesit Effiong, an analyst at SBM Intelligence.

While many were deceived, others joined knowing the risks. Waris Oyedele, a 25-year-old shoemaker from a low-income household, invested his savings after seeing his first return grow. He planned to support his younger brother’s university education with the profits. When CBEX collapsed, he was devastated.

“I felt bad because we had a lot of plans on it,” Oyedele said. “Now it has gone.”

Ponzi operators prey on psychological impulses: the fear of missing out, the desire to belong, and the allure of easy money. “It thrives on aggressive marketing,” Effiong explained. “All of that is to prey on the psychology of potential investors.”

MacEbong warns that emerging technologies are only making these scams harder to detect. “Fake news and misinformation campaigns will become supercharged using AI tools,” he said. “Even well-informed people are getting fooled. For those with lower exposure, they are practically defenceless.”

Experts interviewed by Al Jazeera urged stronger SEC enforcement, proactive scam detection, and nationwide financial literacy campaigns.

“There has to be a lot of financial education,” Effiong said. “The public must learn to spot the red flags. If it sounds too good to be true, it almost always is.”

The EFCC announced on May 26 that it had recovered part of the stolen funds and arrested two CBEX promoters. But for victims like Fadahunsi, justice is cold comfort.

“Whatever the authorities retrieve, I am sure nothing is going to come to me. I’ve moved on,” he said. “That’s a very tough lesson. Now, I would rather keep my money in my account and spend it till the last dime.”