What once relied on word-of-mouth and text messages has now evolved into sleek websites, crypto buzzwords, and social media influencers. But no matter the packaging, the outcome is often the same: financial ruin for unsuspecting investors, JOSEPHINE OGUNDEJI writes

Over the years, Nigerians have painfully learned that not all that glitters is gold. From MMM, which collapsed in 2016 after fleecing millions of their life savings, to newer schemes like CBEX that lure the public with high returns and vague business models, Ponzi schemes have only gotten more sophisticated.

Yet, the playbook remains the same: promise big, deliver little, crash eventually.

So, how do you stay ahead and avoid becoming the next victim?

Details emerged on how promoters of the fraudulent Ponzi scheme, Crypto Bridge Exchange, aka CBEX, convinced hundreds of thousands of investors to put money into the trading platform.

CBEX, a digital investment platform, offered investors 100 per cent profit after 30 days of purported AI trading.

No fewer than 600,000 Nigerians reportedly invested in the scheme and lost N1.3tn after it collapsed on Monday.

Findings revealed that promoters of the platform operated under a company registered as ST Technologies International Limited.

ST Technologies was registered with the Corporate Affairs Commission on September 25, 2024, and the Economic and Financial Crimes Commission’s Special Control Unit Against Money Laundering on January 16, 2025. Copies of the certificates were obtained by PUNCH correspondents.

One of the documents was titled, ‘Certificate of Increase in Issued Share Capital of ST Technologies International Limited Company Registration No. 7955973.’

It read, “The Registrar-General of the Corporate Affairs Commission hereby certifies that pursuant to the resolution and notice of increase in share capital dated 4th December 2024, and presented for filing on 5th December 2024, in respect of the above-named company, the increase in share capital from N1,000,000 to N201,000,000—by the creation of 200,000,000 ordinary shares of N1 each and preference shares of N0 each—has been registered with the commission. Given under my hand at Abuja this 17th day of December 2024.”

Similarly, the EFCC’s certificate of January 16, 2025, stated, “ST Technologies International Limited has been duly registered in accordance with the provisions of Section 17(2)(a) of the Money Laundering (Prevention and Prohibition) Act 2022, and any other applicable law or regulation.”

Some of the victims, who spoke to our correspondents as published in Saturday PUNCH, said the registration certificates gave them confidence that the scheme was authentic.

“They were also doing charity, hospital outreach, paying hospital bills… it was a coordinated approach,” an investor who asked not to be identified said.

A check on the CAC’s website confirmed that the company remained active, though Saturday PUNCH could not access the names of its board of directors.

Open-source intelligence platforms such as NgCheck, B2BHint, and Finelib did not display the company’s address, board members, and other critical information.

A video clip from a Nigerian television station, ITV, identified one Adefowora Abiodun as the leader of ST Technologies International Limited, while another official, Oluwanisola Adefowora, was introduced as the company’s representative in Nigeria.

In the footage, the duo encouraged Nigerians to invest in the scheme and invite others to join, claiming it would help improve their standard of living.

“With the help of ST, you will not lose money. All you need to do is just to follow the order. They give advice; go in that direction. They are a group of analysts based in the United Kingdom,” Adefowora said.

The video was recorded on February 10, 2025, during the inauguration of the firm’s Abuja office, attended by a crowd.

Greed, ignorance

Ponzi schemes thrive on two key ingredients: greed and ignorance. The masterminds behind them promise unrealistically high and consistent returns, far beyond what genuine investments like mutual funds, real estate, or treasury bills can deliver. To make their scam look legitimate, they often cloak it in complex jargon, pseudo-business models, or fancy presentations that confuse rather than clarify.

Many go a step further, leveraging religion, community affiliations, or the influence of popular figures to build credibility and manipulate trust. And when early investors, often friends or family, appear to make quick profits, skepticism gives way to blind faith.

Too good? too risky

The first rule when evaluating any investment is: if it sounds too good to be true, it probably is. Ponzi schemes typically promise unrealistically high returns with little or no risk. In the world of finance, risk is inevitable. All legitimate investments, whether in stocks, real estate, or bonds, carry some degree of risk. A genuine investment opportunity may offer solid returns over time, but it will never guarantee an endless, risk-free profit. If you hear someone boasting about returns that are significantly higher than the market average, especially without detailing how the money is made, be skeptical. In fact, if an investment offers more than you can reasonably expect from a legitimate venture, it’s likely an illusion designed to attract your money.

Check for regulations

Do your research before parting with your hard-earned money. Legitimate investment platforms are typically regulated by national financial authorities. In Nigeria, for example, the Securities and Exchange Commission and the Central Bank of Nigeria oversee the activities of financial institutions and can confirm whether a company is properly licensed. A quick search on their websites can provide you with the relevant details. When you look into an investment, ask yourself: Where is the proof of their business model? How do they make money if it’s not coming from new recruits? If the company cannot provide clear, verifiable information about how it generates income beyond participant fees, it is likely a Ponzi scheme. Many people overlook this simple yet crucial step and end up losing their life savings.

Recruitment means trouble

One of the classic warning signs of a Ponzi scheme is the focus on recruitment. In Ponzi schemes, the real money comes not from actual business operations, but from the new money invested by recruits. If you are promised commissions or bonuses for signing up new investors, you’re likely being drawn into a pyramid structure.

These schemes rely on constant new recruitment to keep the money flowing, and once the influx of new investors slows down, the entire operation collapses. This is what happened in the MMM debacle and is currently happening in various schemes like CBEX. When recruitment becomes the main source of income, rather than selling a product or providing a service, you should immediately question the sustainability and legitimacy of the platform.

Look deeper

In today’s digital age, many Ponzi schemes have adapted by hiding behind the allure of cryptocurrency and forex trading. While both of these are legitimate financial markets, scammers exploit their complexity to confuse investors and seem credible. Ponzi operators will often promise extraordinary returns from crypto investments or forex trading without explaining how it works, which is an immediate red flag.

While there are legitimate businesses in these sectors, scam platforms often operate without regulation and prey on the excitement surrounding digital currencies. They might ask you to invest in a “new crypto” or “exclusive forex opportunity,” offering huge returns. However, legitimate crypto and forex platforms are transparent, have clear business operations, and are regulated by financial authorities. If the company cannot explain its operations or is overly secretive, it’s likely a scam.

Ignore hype, testimonials

Don’t be swayed by glowing testimonials or social media posts claiming “easy profits” or “success stories.” In many cases, the early participants in Ponzi schemes are paid with the money invested by new recruits, which creates the illusion of success.

These testimonials are not proof of legitimacy, they are simply part of the marketing strategy to draw in more victims.

Fraudulent platforms may feature stories from happy customers who “made thousands in just a few weeks,” but once the recruitment slows down, those very investors lose everything. Instead of relying on testimonials, look for audited financial reports or regulatory oversight. A legitimate company will have clear, verified financial statements that show how profits are made and where the money is coming from.

Excuses = exit plan

When you notice that payments are delayed or that the company is constantly offering excuses for why your withdrawal isn’t processed, it’s time to act. “Technical issues,” “system upgrades,” or “pending approvals” are classic stalling tactics used by Ponzi schemes when they’re on the verge of collapse. Once the money coming in from new recruits no longer covers the payouts to earlier investors, the scheme falls apart.

It’s critical to be vigilant at this stage; if the company is consistently postponing withdrawals or giving vague explanations for payment delays, it’s a clear sign the business model is unsustainable. These excuses are often used to buy time as the company prepares to shut down.

Fear of missing out

Ponzi schemes often rely on psychological pressure to get people to act quickly. If you hear phrases like “don’t miss out” or “this is a once-in-a-lifetime opportunity,” take a step back and think carefully. These are emotional manipulation tactics designed to make you feel like you’ll regret not participating. Many scammers play on FOMO (fear of missing out) to push people into rushing decisions without doing proper research. Take your time. Good investment opportunities are built on facts, not fear. Always remember that an investment that requires urgency is likely too risky or fraudulent to be worth your time.

Quick money trap

Building wealth is a long-term process that requires patience, planning, and informed decision-making. There’s no shortcut to financial success. Ponzi schemes, however, lure people with the promise of quick profits, often in just a matter of weeks or months. Unfortunately, the quick gains are rarely sustainable, and once the scheme collapses, the losses are often devastating. If an opportunity promises fast returns with little effort, it’s usually a sign that it’s too good to be true. Sustainable wealth is built over time, not in a hurry.

Stay smart, safe

The most important defense against Ponzi schemes is financial literacy. Educate yourself about how investments work and how to identify potential scams. Always ask questions, research thoroughly, and verify the legitimacy of any platform before you invest. If something feels off or too good to be true, it’s better to walk away. Informed decision-making is the key to protecting your finances and building a secure future. The promise of quick wealth might sound tempting, but the long-term consequences are not worth the risk.

In a world where the promise of quick riches often clouds judgment, it’s essential to approach any investment opportunity with caution and diligence. Ponzi schemes thrive on the allure of high returns, the lack of transparency, and the pressure to act quickly. However, by staying informed, conducting thorough research, and being skeptical of promises that sound too good to be true, you can protect yourself from falling victim to these scams.

Remember, building wealth is a gradual process that requires patience, knowledge, and informed decisions. Legitimate investments come with risks, but they also offer the potential for sustainable returns over time. By staying vigilant and prioritising financial literacy, you ensure that you make decisions based on solid principles, not the fleeting temptation of fast money.

At the end of the day, there is no shortcut to financial security. Be smart, be cautious, and always trust in the power of knowledge to guide you towards safer, more reliable investment opportunities.