Ponzi Scam – A Cybersecurity Insight – In early 2025, Nigeria was rocked by the collapse of two Cryptocurrency platforms, CBEX and PCEX, both of which attracted thousands of investors with promises of rapid and significant financial returns.
These platforms targeted everyday Nigerians, leveraging the increasing popularity of cryptocurrency and the allure of decentralized finance (DeFi) to entice users into depositing funds.
As it turned out, these platforms operated more like elaborate Ponzi schemes, raising deep concerns about cybersecurity, digital literacy, and regulatory oversight in the country’s financial ecosystem.
This report unpacks what happened, how the perpetrators moved illicit funds, and the lessons that can be drawn to help investors better protect themselves in the digital age.
CBEX: Disguised as a Legitimate Exchange
CBEX presented itself as a crypto exchange affiliated with the ‘China Beijing Equity Exchange’, a claim that was entirely fabricated.
Through social media campaigns, WhatsApp groups, and influencer endorsements, CBEX promised investors a 100% return on investment within just 30 days.
The pitch was simple but compelling: deposit crypto, watch your investment grow through AI-powered trading bots, and get paid monthly.
The platform also encouraged referrals, rewarding users who brought others onboard. This strategy rapidly expanded their user base and capital inflow, echoing the hallmarks of a pyramid scheme.
By April 2025, CBEX froze user accounts without warning.
Withdrawal requests were ignored, and support lines went silent.
Enraged investors stormed supposed office locations in Ibadan and Lagos, only to find them abandoned.
Although figures vary, reports suggest that the platform may have taken in over ₦1 trillion in deposits.
CBEX’s downfall unveiled its connections with other suspicious entities like LWEX and PCEX, with many similarities in user interface and operational methods.
How CBEX Moved Investor Funds
The theft was sophisticated and methodical.
CBEX used the TRON blockchain to assign each user a unique deposit wallet.
Once a deposit was made, the platform immediately transferred the funds into central wallets controlled by its operators.
From there, the money was funneled into a complex web of wallets to mask its origins.
Funds were then converted into stablecoins like USDT and USDD and bridged to other blockchains like Ethereum.
Some assets were even converted back to TRON, illustrating the fluidity of the scam’s operations.
These tokens were subsequently sent to centralized exchanges such as OKX, Bitget, and HTX, where they were likely traded for fiat or moved further to more anonymous wallets.
Investigators also found connections to Huione Pay, a Southeast Asian payment platform previously flagged for enabling financial crime.
Blockchain forensics showed that wallets linked to CBEX were actively transacting with wallets connected to Huione Pay, adding another layer to the laundering operation.
In addition, some user KYC data was reportedly compromised and leaked onto the darknet, raising concerns about future identity theft and data exploitation.
PCEX: A Looming Collapse?
PCEX, another platform that gained traction around the same time, is under intense scrutiny.
Though it has not yet collapsed like CBEX, users have reported prolonged withdrawal delays, suspicious transaction patterns, and a lack of transparency about the platform’s leadership and location.
PCEX is not registered with the Nigerian Securities and Exchange Commission (SEC), raising red flags among crypto analysts and consumer protection advocates.
Despite some users claiming they have been paid, increasing evidence suggests that PCEX could be operating a similar scheme to CBEX, using new deposits to pay out earlier investors.
Social media has become a battleground, with some influencers defending the platform while others urge immediate withdrawal.
Authorities have not made a formal move, but the SEC has warned that platforms not registered with them are operating illegally and subject to enforcement actions.
Cybersecurity Lessons and Investor Protection
The CBEX scandal underscores a crucial issue: the average investor’s lack of awareness about cybersecurity in the crypto space.
The following lessons are essential for anyone involved in digital investments:
- Regulatory Verification: Always check if a platform is registered with the SEC or a credible financial authority. Lack of registration is a significant red flag.
- Skepticism toward High Returns: Any platform offering guaranteed or excessively high returns with little or no risk should be treated with suspicion.
- Avoid Sharing Sensitive Data: Never upload sensitive documents to unknown platforms. Always check data privacy policies and storage practices.
- Blockchain Transparency: Use tools like Etherscan or Tronscan to verify wallet activities. Be suspicious if a platform prevents users from tracking their deposits.
- Community Engagement: Join legitimate crypto communities and forums. Peer reviews and discussions often uncover issues before regulators do.
- Incident Reporting: Promptly report suspicious platforms to bodies like the SEC, EFCC, or the Central Bank of Nigeria. Early reports can trigger investigations and prevent further loss.
Conclusion
The fall of CBEX illustrates how scammers are evolving with technology, targeting populations with limited digital literacy.
As cryptocurrency adoption increases across Africa, so too does the risk of fraudulent schemes exploiting trust and technical ambiguity.
It is vital that investors adopt a security-first mindset-one that includes due diligence, technical education, and constant vigilance.
Regulatory bodies must also strengthen oversight and enforcement, partnering with cybersecurity firms to monitor and expose bad actors.
The future of digital finance in Nigeria depends on a secure and transparent ecosystem – one where trust is earned, not promised.
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