Some Nigerians have again fallen victim to a fraudulent ponzi scheme, Crypto Bridge Exchange (CBEX). The digital investment platform had offered investors 100 per cent profit after 30 days of purported artificial intelligence trading. About 600,000 Nigerians were said to have invested in the scheme and lost N1.3tn after it collapsed last week Monday.
This is not the first time Nigerians would be losing their monies to ponzi schemes that promised quick returns on investment. It may perhaps also not be the last going by the desperation to get rich. Criminally minded operators of ponzi schemes take advantage of the greed of some Nigerians and the lack of economic opportunities in the country to milk their victims dry.
Usually, they operate in the same style. The first few weeks and months is a bumper harvest for those who bring their money. They pay them as promised, and as expected, they go to town with the news of "cashing out." Their friends, colleagues, neighbours, and family members jump at such referrals, and in no time, the number of depositors multiply. The operators of the scheme make enough money and find an exit route before the timeline is set for it to crash.
What most people fail to understand is that ponzi schemes are not investment platforms. Due to the unsustainable nature of their "business," it will definitely crash. It is only a matter of time. What they do is rotational funding or peer-to-peer donation and cycling systems. They take money from one person and give to another, offering quick payouts but eventually it
collapses because of the inability to meet up the growing number of new sign-ups.
As always, ponzi schemes disguise as cryptocurrency investment. They even claim to offer forex trading services, using obfuscating jargons to confuse gullible people. It is also characteristic of them to use the social media aggressively, knowing that the bulk of their vulnerable client could be found there. After gaining the trust of the people, they spread exponentially across the country, and just when the "party" is at its peak, they disappear, leaving behind devastating loses, tears, pains, and agony.
In December 2016, the infamous Mavrodi Mundial Moneybox, popularly known as MMM, crashed, leaving millions of people with heartbreak. After the notorious MMM came others like Loom, Ultimate Cycle, Twinkas, Baraza, MBA Forex Trading and Investment Limited, and so many others before the current CBEX.
In 2021, Baraza Multi-Purpose Cooperative Society, with its headquarters in Bayelsa State, became the toast of those desperate to get rich quick. Owned by Architect Miebi Bribena, an acclaimed clergy, the platform claimed that it was not a ponzi scheme but a cooperative society. That was the main convincing tool to woo depositors. Nearly the entire populace had their funds in it, including politicians and top government officials. It was the same for neighbouring states until it eventually crashed.
Worried by its modus operandi, we launched an investigation and discovered that truly it was a ponzi scheme. More so, we were alarmed as to the manner the proprietor was spending the money of depositors. He was at various times spotted in hotels and nightclubs, spending money as if it was going out of fashion. He was also in the habit of buying properties and sponsoring the lavish lifestyle of his female friends.
When we raised the alarm that Baraza was a disaster waiting to happen, many people came for us, accusing us of using our medium to cause disaffection. But in the end, we were vindicated. It was not long before everything went down. Millions of people lost their entire savings and life investment. Some even attempted suicide.
The allure of high returns with little risk has continued to attract unsuspecting citizens to these ponzi schemes. While we can easily blame the government for very obvious reasons, the victims have themselves to blame for ignoring red flags and regulatory advice. It is high time Nigerians know that ponzi schemes under whatever guise are nothing but joy killers.
