Following the disastrous collapse of Crypto Bridge Exchange, a digital investment platform accused of scamming Nigerians of over N1.3 trillion, the Nigerian Senate has launched a thorough investigation into the spread of Ponzi schemes throughout the nation. This purported fraud is regarded as one of the largest financial scams in the country's history. Senators have blamed lax financial monitoring and regulatory shortcomings for the rise in these fraudulent investment schemes.
They caution that Nigeria's social and economic stability is currently being threatened by the pervasive effects, which include rising suicide rates and a growing lack of public trust. On the Senate floor, Senators Tokunbo Abiru (Lagos East) and Osita Izunaso (Imo West) co-sponsored the resolution to begin the investigation, which received unanimous approval.
Lawmakers from all parties denounced the structural flaws that allowed these platforms to operate without oversight. In his presentation of the motion, Abiru emphasized how CBEX deceived millions of Nigerians into falling into a financial trap by taking advantage of lax regulatory oversight by the Securities and Exchange Commission, the Nigerian Financial Intelligence Unit, the Central Bank of Nigeria, and the Economic and Financial Crimes Commission.
Former bank managing director Abiru stated: "CBEX alone caused losses of over N1.3 trillion." This is not a singular instance. It is a component of a troubling trend that began with MBA Forex in 2020 and MMM in 2016. Nigerians continue to be robbed.
He noted that the consequences include suicides, despair, and a rise in skepticism of respectable financial organizations. The state of affairs is "alarming," said Sen. Tahir Monguno of Borno North, who also stated that "we must strengthen our laws and ensure offenders face the full weight of justice." Enough is enough.
Senator Sadiq Umar (Kwara North), who supported the motion, stated that "Regulatory bodies must wake up" because the institutions tasked with protecting the public have failed them. They are trusted to act, not to snooze.
"Unlicensed fintech companies are currently operating under the guise of digital innovation. He is quoted by Persecondnews as saying, "The CBN must tell us what safeguards exist and how many of these platforms are properly vetted."
In order to hold regulatory bodies accountable, Sen. Abdul Ningi (Bauchi Central) encouraged the National Assembly to exercise its constitutional authority under Sections 88 and 14 of the 1999 Constitution. Godswill Akpabio, the president of the Senate, mentioned in his speech that he was a victim of a failed Ponzi scam in the 1990s in Port Harcourt, Rivers State.
According to Akpabio, "history is repeating itself, but with even more devastating consequences now." "N1.3tn disappeared—in an instant. There is an emergency. Families are destroyed. There have been fatalities. We have to take prompt, decisive action.
"We cannot sit back while Nigerians are being robbed blind," he said, endorsing proposals for national financial literacy campaigns and public hearings. To stop further suicides, rebuild trust, and retake our economy from online predators, we must take action.
The Senate's Committees on Capital Market, Banking, Insurance and Other Financial Institutions, Anti-Corruption and Financial Crimes, and ICT & Cybersecurity formed a joint probe to begin a thorough investigation into the digital financial sector.
The main committee has four weeks to turn in its findings and is tasked with holding public investigative hearings.
Beyond the collapse of the Crypto Bridge Exchange (CBEX), this inquiry will look broadly at Nigeria's digital financial environment in order to identify systemic flaws and suggest significant legal and regulatory changes.