SEC Responds to CBEX Closure Concerns in Nigeria

SEC Warns Against Unregistered Digital Asset Platforms Amidst Concerns Over CBEX Operations

The Securities and Exchange Commission (SEC) of Nigeria has issued a stern warning regarding the legality of digital asset trading platforms, stating that any platform not registered with the organization is operating illegally. This statement comes in the wake of troubling rumors concerning CBEX, a digital trading platform, particularly its users’ difficulty in withdrawing funds over the weekend.

During a recent virtual engagement with fintech stakeholders discussing the Investment and Securities Act (ISA) 2025, SEC Director General Emomotimi Agama cautioned Nigerians about the risks of engaging with unregulated platforms.

Concerns Surrounding CBEX

The situation surrounding CBEX garnered significant attention on social media, with numerous users expressing worries that it might resemble a Ponzi scheme. The primary concern arises from reports of users being unable to access their funds, raising fears that the platform may have collapsed.

While some users claim that CBEX is still operational, albeit with temporary withdrawal restrictions due to its internal policies, the platform has faced increased scrutiny. CBEX promotes itself as an investment opportunity, promising users a 100% return on investment within one month, exclusively in USD, and offers bonuses for referrals.

Furthermore, an investigation by Nairametrics has confirmed that CBEX is not registered with the SEC, highlighting its potential illegality.

Crackdown on Fraudulent Activities

The recent engagement emphasized the SEC’s commitment to enforcing the regulations outlined in the newly signed ISA 2025. Agama noted that this legislation lays down specific rules for digital asset platforms, including mandatory registration, aimed at fostering transparency and trust within the sector. This regulatory framework equips the SEC to effectively combat illicit activities such as Ponzi schemes, pump and dump token schemes, and unregistered exchanges, thereby enhancing investor protection.

Agama elaborated on the implications for influencers and celebrities, warning that promoting dubious investment opportunities could be detrimental to the general public and will not be tolerated.

The SEC’s enhanced authority under the ISA 2025 allows for the prosecution of Ponzi scheme promoters in Nigeria. In a recent television interview, Agama remarked that prior to the enactment of this law, the Commission lacked the legal means to take action against such operators, complicating efforts to hold them accountable.

The new legislation imposes significant consequences on those engaged in Ponzi schemes, including potential prison sentences of up to ten years and fines of 40 million Naira. Agama expressed confidence that the SEC now possesses the necessary tools to remove fraudulent operators from the market, ultimately fostering a more secure environment for investors and boosting public confidence in Nigeria’s financial landscape.