The Senate has launched a comprehensive investigation into the operations of Ponzi schemes in Nigeria, with specific reference to the recent collapse of the Crypto Bullion Exchange (CBEX), which reportedly defrauded Nigerians of over N1.3 trillion (approximately $847 million).

The resolution followed a motion sponsored by Senator Adetokunbo Abiru (APC, Lagos East), and co-sponsored by Senator Osita Izunaso (APC, Imo West), during plenary on Tuesday.

The Senate mandated a joint committee comprising Banking, Insurance and Other Financial Institutions; Capital Market; Anti-Corruption and Financial Crimes; and ICT and Cybercrime to conduct investigative and public hearings across the six geo-political zones. The committee is expected to report back within four weeks.

Senator Abiru, in his lead debate, noted the alarming proliferation of fraudulent investment platforms such as MMM Nigeria (2016), MBA Forex (2020), and now CBEX, which have devastated the finances of countless Nigerians, leading to depression, family breakdowns, and suicides.

?The CBEX incident is particularly troubling. It lured millions of Nigerians with promises of outrageous returns and collapsed abruptly, resulting in one of the most devastating financial scams in the nation?s history,? Abiru stated.

He decried the failure of regulatory agencies?including the Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN), Economic and Financial Crimes Commission (EFCC), and the Nigerian Financial Intelligence Unit (NFIU)?to act promptly despite the scale and visibility of CBEX?s operations.

Senator Abiru emphasized that the rise of digital Ponzi schemes is being fueled by high youth unemployment, poverty, low financial literacy, and limited access to formal investment platforms. He called for urgent reforms to protect vulnerable citizens.

In support of the motion, Senate Chief Whip Tahir Monguno (APC, Borno North) described the situation as ?alarming,? urging the Senate to hold regulatory bodies accountable for their inaction.

Senator Sadiq Umar (APC, Kwara North) also backed the probe, stressing the importance of protecting citizens and restoring trust in Nigeria?s financial institutions.

Chairman of the Senate Committee on Appropriations, Senator Olamilekan Adeola (APC, Ogun West), criticized the regulatory bodies for their lapses, stating:

?Ponzi operators have taken advantage of our weak regulatory framework. It is unacceptable that billions of naira are lost while regulatory agencies remain passive. We must act decisively.?

The Senate further resolved to use its constitutional oversight powers to investigate the regulatory failures that allowed CBEX and similar schemes to operate unchecked and recommend mechanisms to prevent future occurrences. (Vanguard)

Update news