significant number of Nigerians have expressed outrage and recounted substantial financial losses on social media following the alleged collapse of a digital asset trading platform known as CBEX. Investors claim that over N1.3 trillion vanished from their accounts on Monday.
The platform, which reportedly operated without the authorization of the Nigeria Securities Commission (SEC), abruptly crashed on Monday, leaving users unable to access the funds in their digital wallets. CBEX also reportedly locked its official Telegram channels and suspended withdrawals. In a move that has further fueled suspicions, the platform allegedly offered investors the option to pay $2,000 for a $200 verification or $1,000 for a $100 verification, raising concerns of a potential exit scam.
Understanding CBEX:
CBEX presented itself as a digital asset trading platform promising an exceptionally high Return On Investment (ROI) of 100% within 30 days. Its stated aim was to establish a secure and transparent trading environment. However, its operational methods are now under intense scrutiny due to widespread allegations of fraud and deceptive practices. Reports suggest that CBEX displayed fabricated withdrawal records, seemingly to conceal the difficulties users faced when attempting to retrieve their funds.
Funds Likely Irrecoverable:
Cryptocurrency expert and security analyst Taiwo Owolabi, analyzing the situation on an X (formerly Twitter) space hosted by Trending X, stated that available data indicates the allegedly stolen funds were transferred to a specific TRX address (TDqSquXBgUCLYvYC4XZgrprLK589dkhSCf). He estimated the total volume of USDT pilfered to be around $847 million, with the potential for this figure to increase.
Owolabi emphasised the bleak outlook for investors seeking to recover their funds, citing CBEX’s unlicensed status and the rudimentary design of its website, which he believes was intentionally made to resemble the legitimate platform ByBit. This, he suggests, was a tactic to later claim a security breach.
He further explained the alleged modus operandi: user payments were directed to a TRX account, from which they were immediately moved, consolidated, and converted to USDT and then ETH. Consequently, users logging into their CBEX accounts would see only fabricated numbers, with all displayed trading activities and AI trading being fictitious. Owolabi likened the platform’s withdrawal process to a “rob Peter to pay Paul” scheme, where early investors might receive funds from later deposits to create a false sense of legitimacy and encourage further investment and referrals.
Owolabi concluded that unless some individuals opt to pay the exorbitant verification fees, which might be used to selectively pay off a few to maintain the facade, the funds invested in CBEX are likely lost.
SEC’s Prior Warning:
This incident follows a recent warning issued by the Nigerian Securities and Exchange Commission (SEC) cautioning Nigerians against investing in unregistered online trading platforms. The SEC specifically highlighted the newly enacted ISA 2025, signed by President Bola Tinubu, which criminalizes the operation of online forex trading platforms or related services by unregistered entities.
The SEC urged any businesses intending to operate in these areas to contact its Department of Registration, Exchanges and Market Infrastructure (DRM) for guidance on the registration process to avoid potential sanctions.
