Nigerians have looted the office of digital asset trading platform, CBEX after hundreds of users saw their account balances plummet to zero following the exchange’s collapse.
According to a report by BBC Pidgin, investors reportedly failed to withdraw their funds after the exchange announced it would be suspending withdrawals on April 9. The platform cited a “security breach” and promised users a full return on damages by April 15. However, many traders saw their account balances drop to zero following the suspension.
Videos circulating on social media platforms showed traders in tears upon finding out they have lost all their funds after depositing on their CBEX accounts. Many of them claimed to have invested their life savings into the platform, only to be left devastated once all their money vanished seemingly overnight.
“Guys, they said I should check my balance now. Zero balance, there’s nothing there. To think I just did this thing two weeks ago,” cried one Nigerian trader in a video, who allegedly lost 8.7 million naira on the platform or equal to $5,432.
The exchange reportedly closed down all their Telegram groups and wiped out users’ balances. As a result, a group of angry Nigerian traders stormed the CBEX office in the Oke Ado area of Ibadan and began looting items.
In a video circulating on social media, the angry mob were seen taking items from the office, including air conditioners, glass windows fans, and other valuables.
In light of the incident, the Nigerian Securities and Exchange Commission warned citizens about the risks surrounding unregulated digital investment platforms and potential ponzi schemes.
Despite not mentioning CBEX by name, SEC Director Emomotimi Agama alluded to the controversy around “a particular platform” and clarified that it was not registered with the SEC. Therefore, it was operating illegally in the region.
Moreover, he explained that the SEC now has jurisdiction to investigate and shut down unlicensed digital trading platforms, as well as prosecute influencers and celebrities who endorse suspicious money-making schemes.
It is also important to note that this is not the first time CBEX has been flagged as suspicious by financial authorities.
Back in April 2024, the Hong Kong Securities and Futures Commission declared CBEX as a suspicious trading platform. This is due to the fact that many local investors have complained about having difficulties withdrawing crypto assets from the platform.
“The entity is suspected to have deceived investors with fake withdrawal records,” stated the SFC.
Further investigation by the SFC revealed that while the trading platform claimed to hold a digital asset license on its website, it does not hold any relevant digital asset license in Canada where it claims to be headquartered or in its Japan branch.
How does the CBEX Group work?
CBEX promotes itself as a cryptocurrency trading platform that utilizes artificial intelligence to generate profits for investors. It gained popularity in late 2024 because it promised traders 100% returns within just a month after depositing funds. This led investors to believe their funds would double in just 30 days.
The platform reportedly only accepts deposits in U.S. dollars. Its sleek website interface also resembled those of established crypto exchanges, which made it seem legitimate. Its referral based bonus system made current users eager to invite their friends, families and colleagues to register on the platform as well, drawing in more users.
“With CBEX, you never have to worry about volatility. Join us today and let the AI handle your trading for you,” wrote CBEX on their X account, which currently has more than 3,000 followers.
By February 2025, users on forums like Nairaland began expressing concerns regarding how similar CBEX model was to other historical Ponzi schemes like MMM, which collapsed in 2016.
By April, the platform’s operations came under intense scrutiny following reports of withdrawal suspensions, which sparked panic among traders who found out their funds were locked in the system.
Read the full article here
