Business
‘I invested In A Ponzi Scheme’: Nigerians Fall Victim To Crypto Scams
Experts say financial illiteracy, lax regulations, greed and economic hardship make people susceptible to scam companies.
Lagos, Nigeria — Mandela Fadahunsi, who works at a technical training school in Ikeja in Nigeria’s Lagos, never believed he could fall victim to a Ponzi scheme.
On April 6, the 26-year-old was starting his day when a WhatsApp notification lit up his phone screen. Someone on the group chat for investors of the cryptocurrency investment platform, Crypto Bridge Exchange (CBEX), had tried and failed to withdraw some funds, so they wanted to confirm if it was a general issue. Fadahunsi quickly logged on to his digital wallet and tried to withdraw 500 USDT, a cryptocurrency that stands for United States Dollar Tether, or simply Tether.
But 24 hours later, a process that should have taken just 10 minutes was yet to complete. He knew then that something had gone wrong. He started to panic, but half-hoped it was just a glitch or a minor system error.
“They [CBEX administrators] said it was as a result of the excessive volume of people trying to withdraw, and that all withdrawals have been placed on hold until 15th of April,” Fadahunsi told Al Jazeera.
On the 15th, he and fellow investors waited but heard nothing. On subsequent days, the administrators gave more excuses until the site stopped working altogether, and everyone’s money disappeared without a trace. That is when he realised he had been scammed and might never be able to recover the 4,596 USDT stablecoin in his wallet.
While Fadahunsi tallied his losses, the issue went viral on social media platforms.
Many more Nigerians shared their stories of loss, while others mocked them for losing their money to scammers. Some members of the public, filled with rage, attacked and ransacked CBEX offices in Ibadan and Lagos.
CBEX launched operations in Nigeria in July 2024, claiming to be able to generate immense trading profits using generative artificial intelligence. By January, it had gained serious popularity through referrals and smart advertising.
Fadahunsi and thousands of other people invested with the hope of making a maximum profit – the scheme promised up to 100 percent return on investment after a 40- to 45-day maturation period. At the start, the scheme did pay out, and the testimonies of successful initial investors attracted more people to sign up.
But after nine months of operation, the music stopped as the platform made away with an estimated 1.3 trillion naira ($840m), according to the official Nigerian Financial Intelligence Unit (NFIU). It left investors stunned.
Nigeria’s anticorruption agency, the Economic and Financial Crimes Commission (EFCC), has since labelled CBEX a Ponzi scheme. Experts say the organisers of such scams usually promise to invest people’s money in something that generates high returns, but in reality, it is investment fraud that pays existing investors with funds collected from new ones. Once a large number of people cash out, and new investors into the scheme dry up, it collapses.
Ponzi schemes, including CBEX, are usually not backed by any discernible economic activity, experts say. According to Ikemesit Effiong, from the Lagos-based socioeconomic advisory firm, SBM Intelligence, most times these businesses do not have anything to sell and have no recognisable business models. Even the agriculture-based ones claim to have products that investigators are unable to track. They also largely rely on existing investors to bring in new investors who serve as their downlink in the pyramid scheme.
Experts say that in Nigeria, widespread financial illiteracy, lax regulations, greed, economic hardship and peer pressure make investors susceptible to the machinations of Ponzi organisations that combine aggressive advertising, word-of-mouth campaigns charged by incentives, and initial high returns.
But at the end, the schemes leave victims – many of whom invest their savings, business capital, and borrowed money – unable to do anything but watch their hard-earned money disappear.
‘Make some gains’
Fadahunsi first heard about the CBEX scheme from colleagues at the start of the year. Initially, he was hesitant. But a few days later, his neighbour also mentioned the platform. Recognising that his close associates were participating, and not wanting to miss out, he decided to invest.
“I also thought the money was just sitting in my account, and it could be somewhere where I can make some gains on my money,” he explained.
In early February, he dipped into his rent savings and withdrew the entire 800,000 naira ($517). With that, he bought 500 USDT from the crypto exchange platform Buybit, receiving the coin in his digital CBEX wallet.
Four times a day on the CBEX platform, administrators dropped a code, which they call a “signal”. Investors were required to copy and paste the code into a section of their portal within the hour. CBEX said AI would then use that to make a trade, basically to buy and sell or change positions in such a way that it made a profit from price fluctuations on the investors’ behalf. Each time Fadahunsi pasted in the code, he would get 4.7 to 5 USDT as a profit, all of which accumulated towards his returns.
“So the more you do it, the more the percentage increases. In a month, I got double of 500 USDT,” he said, adding that there were also bonuses for things like referrals.
In March, users said CBEX made an adjustment where they no longer input the signal. Instead, investors just had to turn on an “AI hosting” option at the start of the day. But some investors say this was likely just a ploy to keep them going, to convince them they were still making a profit before everything crashed in April.
While some investors withdrew their returns, by the time CBEX crashed, Fadahunsi had not withdrawn any money. He had wanted to maximise the investment opportunity, to leave the funds to grow for five to six months before using them to buy a plot of land to build his future home. Now, that dream is dead.
“It is very hard, but thank God that my landlord is actually understanding,” he said.
“I am not proud of opening my mouth [to say] that I actually invested in a Ponzi scheme,” he lamented. “If I wasn’t greedy, I should have been able to withdraw two to three times on the platform, and it would have been successful.”
The USDT that CBEX invested in is a stablecoin pegged to the US dollar [File: Afolabi Sotunde/Reuters]
A history of Ponzi schemes
Even before CBEX, Ponzi schemes were not new in Nigeria.
In March, Nigeria’s anticorruption agency published a list of 58 Ponzi schemes presently operating in the country, and advised the public to “be vigilant and proactive”. This highlights the widespread presence of fraudulent entities masquerading as legitimate businesses in the country: in 23 years, Nigerians lost 911 billion naira ($589m) to Ponzi-related scams, the National Deposit Insurance Corporation (NDIC), which protects the country’s banking system, said in 2022.
Often, Ponzi schemes are able to operate by leveraging grey areas, such as obtaining an irrelevant certification that exaggerates their significance or legitimacy.
CBEX, for instance, obtained the EFCC’s anti-money laundering certificate through the corporate identity of ST Technologies International Ltd, and paraded it as a kind of clearance for conducting business.
However, the NFIU said CBEX was never granted a registration by the Securities and Exchange Commission (SEC) to operate as a Digital Assets Exchange, solicit investments from the public or perform any other function within the Nigerian capital market.
Legitimate businesses can be verified by checking the SEC website. However, experts say the vast majority of those who invest in shady schemes seem unaware or uneducated about this – 38 percent of Nigerians are financially illiterate, according to a 2023 central bank report.
At the same time, other victims may be willing participants, at least at first.
Joachim MacEbong, a senior analyst at Stears, a Lagos-based financial advisory firm, said while some victims are unwitting, others intentionally walk into Ponzi schemes hoping to make a quick profit before it crashes.
“There are those who know it is a scam, but they always feel they could cash out before everybody else. And so they would make that calculation, and it is largely because of the situation in the country; there is a lot of hardship. This kind of hardship increases the people’s desire to take risks and gamble with their very important funds,” he explained.
Nigeria’s economy has been on a downward spiral for decades, and is worse now that the country is going through its toughest economic downturn in about 30 years. Food prices have soared, and basic amenities are becoming inaccessible as the inflation rate sits at 23.71 percent. Against this backdrop, some see Ponzi schemes as a fast way to break out of the vicious cycle of poverty.
Like the proverbial early bird, early investors benefitted from the CBEX scheme, multiplying their returns for several months. Although social media is agog with complaints and bitter disappointment, some people said they had been able to make major purchases such as land and cars from their investment.
“The time scale at which you enter the investment will determine whether it will be a good investment or you will be a victim,” said Effiong of SBM Intelligence, but he added that many new investors are unaware of this catch.
‘We had a lot of plans’
Waris Oyedele is one of the people who invested their savings in CBEX because of worsening financial hardship in the country.
When he realised that the investment had crashed, he wept.
The 25-year-old comes from a low-income family. He graduated from Obafemi Awolowo University last year, but when he could not get a job, he started working as a shoemaker.
In January, he invested his savings of 800,000 naira (500 USDT); by March he had made 1,200 USDT.
He gave the returns to his younger brother to reinvest to help him pay for his future university studies, and in doing so, help ease their father’s financial burden.
“I felt bad [when we lost the money] because we had a lot of plans on it,” Oyedele said.
“I had a plan of buying a computer and going into UI/UX. Now it has gone.”
He is deeply affected by the situation and has reduced the way he spends his tiny income as he tries to rebuild his savings for future use and to support his brother.
Ponzi schemes play on psychology and human instincts by making it seem as though easy money is within reach, Effiong of SBM said.
All investments involve some form of greed, Effiong explained, and the promise of ending up with a higher return is one of the most elementary forms of human motivation: we all want more and as quickly as possible.
“What [a Ponzi scheme] does is that it also unlocks the deep-seated psychological bend for human beings to join groups – the obvious fear of missing out,” he said. “It also thrives on really aggressive marketing – all of that is to prey on the psychology of potential investors to not slow down.”
Agile tactics
Over the years, Ponzi schemes have employed several techniques to appeal to people, even going the extra mile to try and build public trust and goodwill. CBEX, for example, organised a sports competition and ran scholarships for schoolchildren to throw off suspicion, experts said.
In Nigeria, schemes rely heavily on existing investors who are incentivised to introduce new investors. They also engage in aggressive marketing using local and social media, sometimes involving radio, influencers and celebrity endorsements. Afrobeats stars Davido and Rema are some of the most popular celebrities to have unknowingly endorsed and made promo videos for Ponzi schemes in the past.
Ponzi schemes are also becoming increasingly sophisticated and dynamic as they leverage the latest technologies and digital tools, experts say.
“Many of them have apps with wonderful user experiences, which lend an air of credibility to their enterprise. Many of these scammers go to great lengths to design their products in such a way that they look and appear credible,” Effiong said.
MacEbong from Stears agreed, saying fake news and misinformation campaigns will become supercharged using AI tools, making it easier to hoodwink unsuspecting victims.
“There are numerous examples of generative AI being used to fool people who are even well informed and more savvy. When you turn these various tools against people with much lower exposure and information, they are practically defenceless,” MacEbong explained.
Regulators such as the SEC must become more proactive and come up with agile tactics to rein in Ponzi schemes and protect the public from illegitimate enterprises and shut them down before they cause harm, experts told Al Jazeera.
Businesses must be registered and thoroughly vetted because Ponzi schemes have been erroneously certified in the past, Effiong emphasised.
“There has to be a lot of financial education. Financial literacy is critical, which goes beyond how to make money, but [also] to educate the public on the tell-tale signs of Ponzi schemes. The responsibility also lies with the general public to educate themselves. If it sounds too good to be true, chances are it is too good to be true,” he said.
On May 26, EFCC said it had recovered a portion of the money stolen by CBEX and arrested two individuals promoting it. Al Jazeera tried to contact CBEX for comment through its website and publicly available phone numbers, but all were unavailable or out of service.
Meanwhile, many investors like Fadahunsi have lost hope and believe that the money they invested is all gone.
“Whatsoever the authorities retrieve, I am sure that nothing is going to come to me; I moved on already,” he said. “That is a very tough lesson for me. [Now,] I would rather keep my money in my account and spend it till the last dime.”
Aljazeera.com
The trouble at Dangote Refinery has reportedly deepened as its petrol-producing unit has shut down
Amid the ongoing industrial dispute against Dangote Refinery by the Petroleum and Natural Gas Senior Association of Nigeria (PENGASSAN), the mega refinery has run into new challenges.
Also, data shows that the refinery is facing crude oil challenges as intakes slowed in September.
The refinery’s challenges are also compounded by industrial action as oil unions protest the sack of 800 Nigerian workers at the facility
Africa’s largest refinery is reportedly grappling with operational challenges as crude oil inflows drop sharply in September 2025.
Also, the facility’s petrol-producing unit and residual fluid catalytic cracker (RFCC) have allegedly broken down.
According to the petroleum product-tracking platform, PetroleumPriceNG, the failure to issue new pro forma invoices has triggered hoarding at the refinery, leading to higher petrol prices.
Recall that Legit.ng reported that the 650,000 bpd-capacity refinery increased its ex-depot prices for petrol to N860 per litre, up from N825.
Experts attributed the increase, which also affected other depot operators, to a rise in crude prices.
Meanwhile, crude intake into the mega refinery dropped sharply this month. Data from Vortexa shows that inflows dropped to about 250,000 barrels per day.
Energy policy analysts warn that if the scenario continues, it will be the lowest crude supply to the Lekk-based plant since September last year, when Fitch downgraded it and banks tightened finance lines, shrinking its ability to purchase crude.
With less feedstock coming in, the facility cannot run at optimal capacity, which is currently estimated at 500,000 barrels per day. Also, it shows Nigeria’s vulnerability as the world’s largest single-train refinery struggles to maintain stable production.
As crude supply dips, the RFCC has also gone offline for maintenance, with industry watchers speculating that the unit may not resume full operations until early October.
Meanwhile, the refinery has redirected more low-sulphur straight-run fuel into the export market. Data shows that exports hit 320,000 barrels per day this month, the refinery’s highest cargo shipment on record.
The shift may keep revenue coming, but it starves the Nigerian and African market of the much-needed petroleum product supply.
Experts say product inflows from other regions into West Africa have slowed to less than one million tonnes of petrol and blending components in September. The figure is reportedly below the year-to-date average and marks the weakest September arrival on record.
This means West Africa is receiving fewer petrol imports as Dangote struggles to stabilise operations. The squeeze increases the refinery’s dominance as its failure could have multiple ripple effects in the petroleum product market.
The production challenges have affected the downstream sector. In early September, the massive plant halted sales, promising to resume allocation later in the month.
Already, the delay has created panic, as marketers holding old stocks hoard them, selling at premium rates.
Reports say depot prices surged above Dangote’s N820 per litre ex-depot price of N820 to N870, while Wosbab Lagos recorded the highest daily increase at almost three per cent.
The situation at Dangote demonstrates that sheer size does not guarantee stability. The refinery’s challenges highlight Nigeria’s precarious balance between energy security and vulnerability to global oil volatility.
Every disruption quickly translates into inflationary pressures within the downstream market. For Dangote, the immediate priorities are clear: restore RFCC operations and ensure timely PFI issuance.
For Nigeria, the lesson is more profound: without enhanced upstream output and improved policy coordination, the aspiration of affordable, dependable petrol may remain elusive, even with Africa’s largest refinery.
The World Bank Group, through its private sector arm, the International Finance Corporation, has completed its first securitisation transaction, marking a milestone in the global effort to channel private institutional capital into emerging markets.
In a statement sent to Saturday PUNCH, the lender disclosed that the $510m collateralised loan obligation represents the first tangible step in IFC’s broader strategy to establish an “originate-to-distribute” model for investments in developing economies.
The transaction involves repackaging IFC’s loan portfolio into rated securities, thereby creating a new asset class that meets the risk and return requirements of global institutional investors, including pension funds, insurance companies, and asset managers.
According to IFC, this approach is expected to unlock access to the world’s largest pools of capital while freeing up its balance sheet to finance additional projects across developing countries.
World Bank Group President, Ajay Banga, said the initiative underscores the institution’s ambition to mobilise private investment at scale, describing it as crucial for long-term economic transformation.
“Mobilising private investment at scale is essential to creating the jobs that give people a ladder out of poverty and begin the journey of changing a family’s trajectory for generations,” Banga said.
“This is step one in an originate-to-distribute strategy that holds significant potential to attract private capital at scale. It also frees up our balance sheet so we can support more countries and more private-sector players. The opportunity and the need are much larger, and so is our ambition.”
The deal has already attracted significant interest from investors and was listed on the London Stock Exchange. It features a $320m senior tranche purchased by private investors, a $130m mezzanine tranche insured by a consortium of credit insurers, and a $60m equity tranche.
Goldman Sachs acted as the arranger for the transaction, which is expected to serve as a scalable and replicable model for future issuances. The World Bank Group said it would continue launching regular issuances under this framework, reinforcing its commitment to building a sustainable pipeline for private-sector participation in development finance.
The structure of the deal is designed to address two critical challenges facing development financing. Firstly, it creates a vehicle that gives institutional investors exposure to emerging market credit opportunities that are typically out of their reach. Secondly, it enables the IFC to recycle capital and expand its lending to high-impact projects in countries most in need of support.
The originate-to-distribute approach was one of the key recommendations of the Private Sector Investment Lab, an advisory body established in June 2023. The Lab was tasked with identifying barriers to private-sector investment in emerging markets and designing practical solutions.
By securitising its portfolio, the IFC is demonstrating how innovative financial instruments can bridge the gap between global investors’ appetite for yield and the financing needs of developing nations.
Development experts note that such initiatives are vital for meeting the massive infrastructure, energy, and social investment requirements of low- and middle-income countries. With public funding and traditional aid flows proving insufficient, attracting private capital has become a cornerstone of the World Bank’s strategy under Banga’s leadership.
Analysts believe the success of this transaction will encourage similar models across other development finance institutions, setting the stage for a broader mobilisation of private capital into regions often overlooked by mainstream markets.
For the World Bank Group, this pioneering securitisation is not only a financial innovation but also a signal of its evolving role—transitioning from being just a lender to becoming a catalyst for large-scale investment flows into developing economies.
Business
EXPOSED: How Dangote Enslaves Nigerians, Selling Cheaper Petrol For Togo – Importers Revealed
Some fuel importers and depot owners have raised alarm over what they describe as a double standard by the Dangote Petroleum Refinery, accusing the company of selling petrol to international traders at ₦65 cheaper per litre than the price offered to local marketers.
The Depot and Petroleum Product Marketers Association of Nigeria (DAPPMAN) and the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) claimed the practice was undermining competition and putting local businesses at risk.
The Executive Secretary of DAPPMAN, Olufemi Adewole, revealed that many of their members had bought petrol from Lomé, Togo, where international traders supplied at prices lower than those quoted by Dangote to Nigerian marketers.
“Dangote is selling to international traders at ₦65 cheaper than what he is selling to us. In some instances, we were able to buy from those people and still bring it to Nigeria. They will take the product to Lomé, claiming they are buying large quantities,” Adewole said in an interview with The PUNCH.
He added that repeated requests for supply allocations had either been ignored or tied to conditions that make business unprofitable, forcing importers to look elsewhere.
Marketers Demand Discounts
Adewole further argued that Dangote’s pricing model placed domestic players at a disadvantage.
“Dangote has to give us a discount for freight cost and other expenses between his jetty and our depots. Without this, we can’t sell competitively. People will continue to import if it’s cheaper abroad,” he insisted.
On his part, the President of PETROAN, Billy Gillis-Harry, backed DAPPMAN’s position, confirming that the refinery’s products were indeed cheaper in Togo than in Nigeria.
“Exactly, DAPPMAN said the correct thing. It is true. We don’t want to be saying everything. But the way things are going, one day we will say everything,” Gillis-Harry said.
Dangote Refinery Reacts, Denies Claims
However, in a swift response, the Dangote Refinery dismissed the allegations, suggesting that DAPPMAN was behind the recent labour tension with the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), which accused the company of anti-union practices.
“We now know who is behind NUPENG. Our free delivery starts Monday,” A spokesman for the refinery told journalists on Sunday.
The official also questioned why marketers now sourced fuel from Lomé, asking, “When did they stop buying from Russia and Malta?”
Adewole accused the refinery of using strategically timed price cuts to destabilise the market. He recalled that Alhaji Aliko Dangote once vowed to slash prices whenever importers brought in cargoes, forcing competitors into financial distress.
He described Dangote’s repeated reductions as “calculated moves to stifle competition” rather than patriotic interventions, noting that international buyers were given better deals than Nigerians.
Naija News reports that DAPPMAN insisted that Nigeria’s downstream sector cannot rely on a single refinery.
“While we welcome the Dangote refinery as a major infrastructure project, its contribution has peaked at only 30 to 35 per cent of national demand. The balance continues to be supplied by responsible petroleum product marketers who import and distribute under strict regulation,” Adewole stressed.
He further criticised the refinery’s “free delivery” scheme, claiming marketers were forced to lift 25% of allocations using only Dangote-owned trucks at commercial rates, which added hidden costs.
Refinery to Roll Out CNG Trucks, Slash Prices
Meanwhile, Dangote Refinery confirmed that it would begin deploying compressed natural gas (CNG) powered trucks on Monday as part of its logistics-free distribution initiative.
The company said the rollout would reduce the gantry price to ₦820 per litre, with the expectation of lower pump prices across key states.
Naija News reports that the pricing row comes amid a brewing face-off between Dangote and NUPENG, which recently threatened to embark on strike, accusing the refinery of blocking drivers from joining unions.
DAPPMAN said while the matter did not directly involve them, they were “alarmed by the tone and escalation of the crisis,” warning that the dispute could worsen fuel supply stability in a fragile downstream market.
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