On April 14, 2025, thousands of Nigerians woke up in horror as their investments with CBEX (Crypto Bridge Exchange) disappeared, with balances in their accounts wiped to zero after first experiencing difficulties withdrawing from their accounts on Friday, April 11, 2025. CBEX, which also operates under the corporate identity of ST Technologies International Ltd, Smart Treasure/Super Technology, evaporated overnight. What began as promises of staggering 100% returns in 30 days ended with devastated investors, frozen accounts, and the familiar pattern of founders becoming suddenly unreachable. By the time regulators stepped in, Nigerians who invested in the ‘get-rich-quick’ scheme had already lost up to ₦1.3 trillion (over $800 million).
The CBEX collapse is not an isolated incident but the latest chapter in Nigeria’s recurring Ponzi scheme epidemic. What makes the CBEX case particularly troubling is the profile of its victims—not the stereotypical financially excluded or uneducated individuals, but doctors, civil servants, business professionals, and even financial sector employees who should theoretically know better.
Their stories reflect a more perplexing trend across Nigeria’s financial landscape. According to EFInA’s 2023 Access to Finance nance (A2F) data, approximately 5.5 million Nigerians have invested with illegal fund managers or Ponzi schemes, with a staggering 68% having lost their hard-earned money to these fraudulent ventures. What makes this crisis particularly baffling is who these investors actually are— a reality that challenges everything we thought we knew about financial fraud victims in Nigeria.
The Financially Included Paradox
The data reveals striking contradictions—95% of those who invested in Ponzi schemes were already using formal financial services. They aren’t people seeking alternatives to banking—they’re choosing risky investments outside regulated financial institutions, irrespective of the illegal nature, despite having access to legitimate financial institutions. Our data shows that 72% actively save at banks, while 6% save with formal non-bank institutions like mobile money providers and neo banks. Data also shows that 21% of victims of get-rich-quick schemes have received credit from banks, while 4% have collected loans from other formal non-bank institutions. As high as 82% remit money through banking channels, while 85% of these victims use digital financial services via banking platforms. This isn’t a story of the unbanked seeking financial opportunities— it’s a story of the banked making puzzling, yet irrational, investment decisions.
But Who Are These Investors?
The demographic profile further challenges stereotypes about financial fraud victims— about 62% are men. 79% live in urban areas, while in terms of geo-political zone concentration, 30% of the victims are from the South-South, just as the South-West leads with 34%. As earlier noted, 35% of these investors-turned-victims are formally employed, while 44% are business owners. Only 11% are dependents. Informal workers and farmers account for 5% and 6% respectively. The majority (over 90%) of these “investors” have secondary or higher education. Despite the risky nature of these investments, only 15% of these investors have an insurance product. This paints a picture of economically active, educated individuals with formal employment or business ownership— not citizens desperate for any financial opportunity as a result of marginalisation.
The concentration in urban areas (79%) and in the South-South and South-West regions (64% combined) suggests that proximity to financial infrastructure may counterintuitively increase vulnerability to sophisticated fraud. These regions include major economic centers like Lagos, Port Harcourt, Ibadan, and Benin City—areas with abundant, widespread legitimate financial services access points.
The Education-Protection Gap
With over 90% having completed at least secondary education, the conventional wisdom that education protects against financial fraud appears questionable. These are not uneducated individuals easily duped—something more complex is driving their investment decisions. The data clearly suggests that to be educated is not enough, as education does not equal financial literacy. This raises the question of ‘why are the banked turning to Ponzi schemes?’ Several factors contribute to this paradoxical behaviour:
- Return Gap: Legitimate investments rarely match the extraordinary returns promised by Ponzi operators, creating a perceived opportunity cost for staying within regulated channels.
- Investment Knowledge Gap: Despite general financial literacy, specific investment knowledge may be lacking; only 15% have insurance, suggesting limited understanding of risk management.
- Male Risk Appetite: The significant gender disparity (62% male) may indicate gender differences in financial risk tolerance when compared to 38% female. Anecdotal evidence also suggests that more male adults than females are subjected to financially related societal pressure, pushing them to get involved in these ‘get-rich-quick’ schemes.
- Influence of Employment Status: With 79% being either formally employed or business owners, these schemes are targeted at individuals with some form of income (whether regular or irregular).
- Banking but Not Investing: Though banked, many use financial institutions primarily for transactions rather than investments, leaving them without legitimate wealth-building vehicles. Evidence further suggests that investment products offered by regulated financial institutions do not offer attractive returns, prompting depositors to take their money to places where there is a promise of sumptuous returns, whether legitimate or not.
The Path Forward: Beyond Access to So- phistication
Our data presents a clear mandate for action that goes beyond basic financial inclusion, but:
- Robust investment education focused particularly on risk-reward realities and how to identify fraudulent schemes.
- Legitimate investment innovation is needed from formal institutions to provide competitive returns through regulated channels.
- Male-targeted interventions may be necessary to address the gender imbalance in high-risk investment behaviour.
- Urban financial protection strategies should be developed, recognising that financial fraud thrives even in areas with widespread financial access points.
- Insurance and risk management Education could help address the gap between banking usage and comprehensive financial planning.
- Region-specific approaches should be developed for the South-South and South-West regions
The Bigger Picture: Redefining Financial Inclusion Success
The fact that 5.5 million predominantly banked, educated, employed Nigerians have invested in illegal schemes should reframe how we measure financial inclusion success and investment literacy. Having a bank account clearly doesn’t guarantee protection from financial predators.
As Nigeria continues developing its financial ecosystem, our metrics must evolve beyond counting accounts to measuring financial behaviour, investment literacy, and protection from predatory schemes. The data suggests we need a more nuanced approach that addresses not just access but also the appropriateness of financial services and consumer protection. Until legitimate financial institutions can offer products that meet the wealth-building aspirations of Nigeria’s growing low and middle class, the shadow financial system will continue to claim victims—even among those we consider financially included.
Moving Forward: From Banked to Protected
The road ahead requires collaboration between regulators, financial institutions, employers, and educational institutions. Only by understanding and addressing the complex motivations driving Nigerians toward illegal investment schemes can we build a truly inclusive financial system—one that not only provides accounts but protects and grows wealth for all Nigerians. From a regulatory and consumer protection point of view, there is a need to strengthen monitoring and compliance with extant regulations as a way of raising barriers to entry for illegitimate businesses.
