CBEX: Influencers, celebrities and bloggers promoting Ponzi schemes risk 10 years in jail- SEC
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Amid the ongoing CBEX saga, the Securities Exchange Commission (SEC) has warned influencers, celebrities, and bloggers against promoting unverified and unregistered investment schemes as violators face possible imprisonment under the new Investment and Securities Act (ISA) 2025.
The directives follow reports that some influencers and celebrities promoted CBEX which prompted their followers and innocent Nigerians to fall victim to the Ponzi Scheme where they lost a total of N1.3 trillion. However, the Director General of SEC, Dr. Emomotimi Agama, has explained that the commission could not help victims to recover their losses.
In a statement released yesterday, the commission highlighted it is working with appropriate security agencies such as the Economic and Financial Crimes Commission (EFCC), the Nigerian Police Force (NPF), Interpol, and other relevant law enforcement agencies to investigate and prosecute violators.
Agama stated that the ISA 2025 targets promoters of unregistered schemes and urged celebrities, social media influencers, and bloggers to be wary of endorsing ‘just any investment scheme’ to avoid legal consequences. He explained that perpetrators will face clear penalties and imprisonment.
“We are, therefore, using this medium to warn such persons to desist from promoting unregistered entities,’’ he said.
Also Read: CBEX Ponzi scheme allegation sparks new outrage after users’ funds disappear.
Following the enactment of ISA 2025 last month, SEC affirmed that the law would reinforce its commitment to clean up the investment industry through the recent revocation of licences, suspension of market operators, and crackdowns on unregistered entities are just the beginning of a broader enforcement strategy. Under the new legislation, promoters of fraudulent schemes will face stringent sanctions including a minimum fine of N20 million, and a 10-year jail term.
Agama emphasised that the SEC is capable and ready to tackle Ponzi schemes and will be able to deal with anyone caught in the mess.
“Ponzi schemes will no longer be an avenue for fraudsters to deceive investors. The penalties in the new ISA are stiff enough to deter such activities, and we are committed to implementing them fully. We will shut down their operations and the promoters will be made to face the full weight of the law,” he said.
The DG noted that the SEC had dealt with similar schemes before and would continue to do so by leveraging the new powers granted by ISA 2025 to protect investors and develop the market as the recent collapse of CBEX further underscored the urgency of the situation.
As digital assets are now recognized by ISA 2025 under the SEC’s regulatory umbrella for the first time, this means that Virtual Asset Service Providers and Digital Asset Exchanges must register with the SEC and comply with regulations, closing previous legal gaps exploited by fraudulent operators.
Other SEC’s implementation strategy
While explaining the additional developments in SEC’s innovative strategy, Agama pointed out that podcasts and social media campaigns are rolled out on a timely basis to educate and enlighten Nigerians on the associated dangers that come with investing in unrelated schemes.
The commission is also integrating capital market education into schools universities and other relevant institutions while it urged Nigerians to verify any investment opportunity with the commission before committing funds, warning that once it was too good to be true, it certainly was not true.
“The commission is focused on democratizing wealth through a safe and transparent capital market. We are committed to providing a safe investment environment, the capital market helps you to democratize wealth for everybody. The ISA 2025 thus represents a significant step forward in protecting Nigerian investors and fostering a resilient financial market,” he added.
The SEC DG emphasised that the commission remained committed to protecting investors, in line with its twin objectives of investor protection and market development, urging Nigerians to be cautious, consult professionals before investing, and avoid schemes promising unrealistic returns.
As the CBEX case reiterates the need for financial literacy, being aware of potential scams, and learning from previous occurrences, Nigerians must learn to make informed investment decisions.
Again, red flags to watch out for on suspicious investments include unrealistic returns, lack of transparency, and over-reliance on referrals. CBEX promised unusually high returns with little risk, lacked transparency in its operations, and incentivized referrals, all indicative of a Ponzi scheme. To protect oneself, it’s essential to carry out thorough research, verify a platform’s legitimacy, and understand the risks involved.
