Cyber Security Expert Exposes CBEX’s Criminal Pranks, Doubts Possibility of Recovering Funds
A United Kingdom based Nigerian cyber security expert, Olabode Agboola has made an expose on the modus operandi of controversial wonder bank, CBEX, which has now eloped with trillions of naira belonging to unsuspecting investors.
In a news letter which documents all the tricks and operations of the wonder bank, Agboola described the CBEX activities as one of the most devastating financial scams to be experienced in Nigeria.
Calling it a fraudulent digital asset trading platform which disguised as a legitimate cryptocurrency exchange, the Havard trained software engineer said “CBEX lured thousands of investors with promises of unrealistic and guaranteed high returns.
“As the scheme unravelled, it was estimated that Nigerians lost over N1.3 trillion (approximately $800 million). The Incident exposed significant gaps in the country’s regulatory oversight, financial literacy, and public awareness regarding digital asset investment risks.”
He analysed the scammers’ modus operandi, saying “CBEX marketed itself as a cutting-edge trading platform, claiming to use advanced artificial intelligence and algorithmic Tools to guarantee 100% returns within just 30 days.
“Its professionally designed interface closely resembled legitimate cryptocurrency exchanges, which helped it gain investor trust. A key element of its operation was a multi-level referral system, where investors were required to recruit at least 12 new participants before accessing their supposed profits.
“This structure mirrored the classic Ponzi scheme model, where payouts to earlier investors depend entirely on funds from new entrants rather than genuine profit or investment activity, making it fundamentally unsustainable and deceptive.”
He however lamented that the investors ignored all the red flags and went ahead to push their money into the wonder bank they barely knew. According to him, the red flags included “promised 100% returns in 30 days, a common sign of fraudulent schemes, required recruiting 12 new investors to unlock profits- typical of Ponzi operations, lack of Oversight CBEX wasn’t registered with Nigeria’s SEC, operating outside legal financial regulations and withdrawal restrictions: Users faced blocked withdrawals and vague excuses like “system upgrades” or “security checks.”
These are excerpts from the newsletter, which TNN obtained exclusively: “The CBEX scam mirrors previous fraudulent schemes in Nigeria, notably the MMM Ponzi scheme of 2015-2017, which also promised high returns and collapsed, leaving many in financial ruin. Such recurring scams exploit economic hardships and the allure of quick wealth, emphasizing the need for increased financial literacy and regulatory vigilance.
“Financial experts have highlighted the dangers of unregulated Investment platforms. According to PM News Nigeria, one of the Nigeria top Cryptocurrency analyst, Taiwo Owolabi, it was noted that CBEX manipulated users by displaying fictitious balances while siphoning actual funds through complex cryptocurrency transactions involving TRX, USDT, and ETH. The SEC reiterated that any platform not registered with it is considered illegal urging Nigerians to exercise caution.
“Blockchain Routing via TRON: CBEX strategically used the TRON blockchain due to its low fees and fast transactions, routing funds through multiple wallets to avoid detection and delay potential tracing efforts by forensic analysts.
“Multiple Wallet Hopping: Funds were split and moved across a complex web of anonymous TRON-based wallets, designed to obscure the transaction trail, making it extremely difficult to trace the origin and destination of stolen assets.
“Stablecoin Conversion Technique: Investor funds were quickly converted into stablecoins like USDT and USDD to minimize volatility and facilitate easier cross-border transfers, especially on exchanges that support fast, anonymous trading and withdrawals
“Exchange-Based Laundering: After laundering funds through wallets, CBEX transferred assets to centralized exchanges like OKX, Bitget, and HTX, where funds could be further mixed, traded, or withdrawn, frustrating recovery efforts.
“Lack of Smart Contract Transparency: CBEX’s platform lacked verified or public smart contracts. This prevented external code audits and concealed how funds were handled, enabling backend manipulation without users’ knowledge.
“Transaction Fragmentation Strategy: Large withdrawals were split into smaller micro-transactions. This tactic helped avoid detection by anti-money laundering (AML) systems typically deployed by exchanges and regulatory bodies to flag high-risk behavior.
“Synthetic Dashboard Data: The interface displayed fabricated. balances and trading activity. These figures were disconnected from actual blockchain activity, making users believe their investments were safe and growing legitimately.
“Non-Technical Methodologies: Convincing Platform Design: CBEX’s website mimicked trusted crypto exchanges, including sleek UX, trading charts, and customer support portals, giving users a false sense of professionalism and technical competence.
“Regulatory Blind Spots Ignored: Many users ignored the lack of licensing or government oversight, focusing instead on the platform’s promise of 100% returns-despite warnings from the SEC about unregistered platforms.
“Low Public Technical Awareness: Due to limited knowledge of blockchain operations among the general public, users couldn’t recognize red flags like anonymous wallet routing, stablecoin undering, or unverified transaction trails.
“Beyond the massive financial losses, the CBEX scam raised serious concerns about the compromise of Personally Identifiable Information (PII). As part of its Know Your Customer (KYC) requirements, CBEX collected extensive user data, including full names, national ID numbers, passport details, facial photos, phone numbers, email addresses, residential addresses, and bank account information.
“If this data is leaked to hackers or sold on the darknet, victims could face long-term risks such as identity theft, fraudulent. bank transactions, social engineering attacks, SIM swap fraud, and phishing scams. The exposure of such sensitive PII has the potential to wreak lasting damage on users’ digital and financial lives, even
“The CBEX scam had devastating consequences. Many Nigerians lost their life savings, leading to widespread emotional distress, public outrage, and physical protests in cities like Ibadan against the fraudulent platform.
“Financial Despair: Thousands of victims, including retirees and students, lost significant funds, forcing some into debt and financial instability, with little hope of recovering what was invested in CBEX.
“The Security and Exchange Commission (SEC) and the Economic and Financial Crimes Commission (EFCC) have emphasized the illegality of unregistered platforms like CBEX However, critics argue that proactive measures were lacking, allowing the scam to proliferate. Moving forward, enhanced collaboration between regulatory bodies, law enforcement, and international agencies is crucial to detect and dismantle such fraudulent operations promptly.
“Recovering funds stolen through the CBEX scam presents significant obstacles due to the anonymous and decentralized nature of cryptocurrency transactions. Although blockchain forensics can trace movements of stolen assets, actual recovery remains difficult. The use of shadow platforms like Huione Pay, known for processing illicit funds, and the need for cross-border cooperation may help to reclaim victims’ money and prosecute offenders.
“Anonymity of Crypto Wallets: Many wallets involved in CBEX’S laundering process are unregistered and pseudonymous, making it difficult to legally link them to individuals or seize their contents without user identification.
“Obfuscation Techniques The scammers used transaction splitting and mixed coins across several chains and wallets, bypassing basic AML systems and delaying forensic tracing and takedown actions by cybersecurity experts.
“Cross-Border Legal Procedures: Recovering stolen assets requires working with foreign law enforcement, judicial systems, and financial regulators to issue legal requests freeze accounts, and retrieve funds from overseas crypto exchanges. Hope SEC and EFCC will take this route.
Exchange and Platform Cooperation: Agencies must engage international exchanges like OKX and Bitget for KYC disclosures, transaction data, and account freezes-steps which depend on platform policies and international data-sharing agreements.
Nine Lessons to Learn
“Nigerians must stay vigilant by questioning high-return promises, avoiding referral-based schemes, and verifying platform legitimacy. Protecting personal data, improving financial literacy, seeking expert advice, and reporting scams promptly are essential. Awareness of security features and Influencer-driven hype can help prevent future exploitation and safeguard citizens from devastating losses.
“Be Skeptical of Unrealistic Returns: Any platform promising unusually high returns with little or no risk should raise im mediate suspicion. Legitimate investments carry inherent risks, and guaranteed profits are a hallmark of scams designed to exploit greed and desperation.
“Conduct Thorough Due Diligence: Before investing, research the platform’s regulatory status, licensing, and ownership. Check if it’s registered with national financial authorities. A simple background check can reveal red flags or warnings from nast victims and regulators
“Avoid Mandatory Referral Models: Be cautious of platforms that require recruiting others to access profits or bonuses. This is a classic Ponzi structure, which inevitably collapses, leaving later participants with devastating financial losses and emotional trauma.
“Safeguard Personal Information: Never share identification, bank details, or personal data with unverified platforms. Scammers can use your PIl for identity theft, fraudulent loans, SIM swaps, or even to build new scams using your credentials.
“Understand Basic Financial Principles: Developing financial literacy helps you evaluate investment risks, identify scams, and make informed decisions. Knowledge empowers you to question suspicious claims and avoid emotionally driven or impulsive financial decisions.
“Verify Platform Security Feature: Ensure any platform you use has proper encryption, 2FA (two-factor authentication), and visible security certifications. Lack of these features often points to poor security or outright fraudulent intent.
“Beware of Hype and Influencer Promotions: Scammers often pay social media influencers to promote fake platforms. Popularity doesn’t equal legitimacy. Always cross-check such promotions with independent financial sources before acting.
“Report Suspected Scams Immediately: If you notice suspicious behavior or have fallen victim, report it to financial authorities, cybercrime units, or consumer protection agencies. Prompt reporting helps protect others and supports investigations and potential asset recovery.
“Seek Expert Advise: Before committing to any investment, especially in emerging fields like cryptocurrency, always seek guidance from certified financial experts or advisors. Their insights can help you assess risks, spot scams, and make informed decisions.
“Recommendations for Government: Strengthen regulatory frameworks by enforcing mandatory registration, regular audits, and real-time monitoring of digital asset platforms to protect investors and prevent future scams involving cryptocurrencies and online trading schemes.”
