The Securities and Exchange Commission (SEC) has issued a stark warning to Nigerian investors, cautioning against the use of unregistered digital asset trading platforms. This announcement comes amidst growing concerns surrounding CBEX, a platform facing allegations of withdrawal issues and potential Ponzi scheme operations. The SEC’s firm stance underscores the regulatory body’s commitment to safeguarding investors in the rapidly evolving digital asset landscape.
During a recent virtual engagement with fintech stakeholders, SEC Director General, Emomotimi Agama, addressed the issue without directly naming CBEX, stating, “Very recently, there has been a post that has gone viral around a particular platform and the activities of such platforms. And of course, the aftermath of it is further news of their closure and all of that. In fact, I was tagged in one of those messages. I want to state it very clearly. If it is not registered, it is illegal.”
The alarm bells surrounding CBEX were triggered by user reports of withdrawal difficulties, leading to widespread speculation about the platform’s solvency and legitimacy. Social media platforms buzzed with warnings, with many users labeling CBEX a potential Ponzi scheme. CBEX, which advertised a 100% return on investment within a month and offered referral bonuses, has raised red flags due to its unusually high promised returns and unconventional structure.
A check against the SEC’s official database confirmed that CBEX is not registered with the commission, reinforcing the regulator’s warning. This revelation highlights the critical importance of verifying the registration status of any digital asset platform before investing.
The SEC’s renewed focus on regulating the digital asset space is bolstered by the recently enacted Investment and Securities Act (ISA 2025), signed by President Bola Tinubu. This act provides a clearer regulatory framework for digital asset platforms, including stringent registration requirements, aimed at fostering transparency and trust.
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“The ISA 2025 has established clear rules and regulations for digital asset platforms, including registration requirements to promote transparency and trust. This allows the SEC to crack down on illicit activities, such as Ponzi scheme, pump and dump tokens, and unregistered exchanges, creating a safer environment for investors,” Agama explained.
This regulatory push also extends to curbing the influence of celebrities promoting potentially harmful financial products. “It is important that even for celebrities, we must be cautious around what we do. Becoming influencers or introducing meme coins, that does not mean well for the generality of Nigerians, are not going to be tolerated,” he warned.
It’s crucial for investors to conduct thorough due diligence and verify the legitimacy of any investment platform before committing their funds.
The SEC’s actions reflect a broader trend of increased regulatory scrutiny in the digital asset sector. As technology continues to reshape financial markets, regulatory bodies are adapting to protect investors from potential risks. The message is clear: proceed with caution and verify before investing.
