Senate has mandated its Committees to conduct a comprehensive investigations and public hearing on the operations of ponzi schemes in Nigeria and report back in four weeks.
The committees are Capital Market, Banking, Insurance and Other Financial Institutions, Anti-Corruption and Financial Crimes and ICT and Cybercrime.
This followed the adoption of a motion on “Investigative hearing into the operations of Ponzi Schemes in Nigeria, with particular reference to the recent Crypto Bullion Exchange (CBEX) incident” at plenary yesterday.
The motion was sponsored by Sen. Abiru Adetokunbo (APC-Lagos) and Sen. Osita Izunaso (APC-Imo).
Adetokunbo, presenting the motion said that the economic well-being and financial security of Nigerian citizens were essential pillars of national stability and growth.
He said that it was the duty of the government to protect the populace from exploitative, predatory and fraudulent financial practices and schemes that threaten their livelihoods.
He expressed concerns on rapid proliferation and alarming rise of unregulated and fraudulent investment schemes commonly known as Ponzi or pyramid schemes.
He listed such as MMM Nigeria in 2016, MBA Forex in 2020 that had repeatedly defrauded millions of Nigerians.
This, he said was causing severe financial hardship and in some cases driving victims to depression, family breakdowns and even suicide.
“The recent case of Crypto Bullion Exchange (CBEX), a digital investment platform which lured millions of Nigerians with the promise of outrageous returns, before suddenly collapse, resulted in investors losing more than N1.3 trillion making it one of the most devastating financial scams in the country’s history.”
He said that the CBEX incident was not an isolated case, but part of an existing and growing pattern of unregulated and fraudulent schemes leveraging technology and social media to deceive the public.
According to him, the schemes often employ tactics such as referral commissions, celebrity endorsements and fake testimonials to build credibility and drive recruitment.
He said that it was worrisome that CBEX operated for an extended period without facing sanctions by either the Securities and Exchange Commission (SEC).
He added that not even the Central Bank of Nigeria (CBN), the Nigerian Financial Intelligence Unit (NFIU), or the Economic and Financial Crimes Commission (EFCC) sanctioned the operators of these ponzi schemes.
Adetokunbo said that the growing sophistication of such fraudulent platforms, combined with high youth unemployment, widespread poverty, low levels of financial literacy and a lack of access to formal investment opportunities” make the Nigerian population increasingly vulnerable to such schemes”.
According to him, “Section 88(1) (a) and (b) of the Constitution of the Federal Republic of Nigeria 1999 (as amended), empowers the National Assembly to conduct investigations into “any matter to which it has power to make laws.