CBEX: Experts Seek Strengthening of Financial Intelligence, Inter-Agency Collaboration

•Urge FG to revisit 2025 budget over drop in oil price benchmark

•As cleric warns against Ponzi schemes, urges govt to alleviate citizens’ suffering

Ndubuisi Francis and Folalumi Alaran in Abuja 

Financial experts have continued to appraise the market following the recent collapse of a Ponzi scheme orchestrated by Crypto Bridge Exchange (CBEX), against the backdrop of Nigeria’s efforts to exit the Financial Action Task Force (FATF) grey list.

They called for the strengthening of financial intelligence gathering as well as inter-agency collaboration.

CBEX, a digital investment platform described by the Securities and Exchange Commission (SEC) as unregistered to operate any such service, offered investors 100 per cent profit after 30 days of purported trading.

No fewer than 600,000 Nigerians who reportedly invested in the scheme were caught in the web and lost a staggering N1.3 trillion after the ponzi scheme collapsed recently.

Relatedly, renowned cleric, Prophet Sam Olu Alo, warned Nigerians against investing in Ponzi schemes, stressing that hard work remains the only sustainable path to financial success.

In a signed statement, the cleric said many Nigerians fell for Ponzi schemes out of desperation, and often blamed the government for unemployment.

Alo said even with more job opportunities, many would still pursue quick-fix wealth.

His warning came in the wake of the collapse of the CBEX digital trading platform – a Ponzi scheme that reportedly defrauded thousands of Nigerians, wiping out over N1.3 trillion in investments.

In separate interviews with THISDAY on the consequences of the CBEX saga vis-a-vis Nigeria’s current bid to exit the grey list of the global anti-money laundering watchdog, FATF, some financial experts offered some perspectives.

Nigeria was placed on the FATF “l-grey” list (intense monitoring) on February 24, 2023 due to deficiencies in its anti-money laundering (AML) and counter-terrorism financing (CTF) regime.

In response to implications of the CBEX issue and Nigeria’s bid to exit the grey list, former Commissioner for Finance, Imo State, Prof. Uche Uwaleke, stated that despite the Ponzi incident, the country was on course, adding that the enactment of the Investment and Securities Act (ISA 2025) is a major boost.

Uwaleke stated, “Nigeria is expected to implement some action points by May 2025, including strengthening regulatory frameworks, improving financial intelligence and ensuring effective enforcement. I think the country is on course and the enactment of ISA 2025 is a major boost.

“However, against the backdrop of the CBEX saga, there’s need to firm up financial intelligence gathering as well as inter-agency collaboration.”

President of the Association of National Accountants of Nigeria (ANAN), Prof. Mohammed Mainoma, stated that the CBEX saga would not counteract Nigeria’s move to exit the grey list, explaining that rather than torpedo the effort, the FATF would see the country as striving to meet the agency’s established standards.

Mainoma, who is also Vice Chancellor of Prime University, Abuja, and former Vice Chancellor, Nasarawa State University, said, “They will rather be happy that we are meeting the standards they established.

“As a global watchdog, it is important to encourage those that are able to close such schemes and educate the people. The level of awareness that came with the incident has cleared the environment.”

On whether the CBEX incident was a pointer to lax financial intelligence system in the country, he said it had nothing to do with failure of financial intelligence.

He stated, “Not until something goes wrong, you may not be in a position to know that there is a problem…Until they’re unable to pay, there is nothing the financial intelligence system can do.

“Now that it is clear that there is deception, then you expect to see what they can do to get the perpetrators.”

Reacting to the current declining price of oil in the world market against the projected $75 per barrel in the 2025 federal budget, Uwaleke and Mainoma expressed concern.

According to Uwaleke, the development calls for a revisit of the estimates in the 2025 budget with a view to prioritisation of major capital items, delaying non-developmental capital expenditure and cutting overheads.

He said, “I think the current bearish trend of crude oil prices in the international oil market should be a valid source of worry to the fiscal authorities given the bullish assumptions underlying the 2025 budget.

“The development is capable of widening the fiscal deficit, increasing the public debt, reducing Fx inflows from crude oil sales and ultimately FAAC revenues which are distributed among the FG and sub-nationals.

“It calls for revisiting the estimates in the 2025 budget with a view to prioritisation of major capital items, delaying non developmental capital expenditure and cutting overheads.

“It also calls for expediting the implementation of the proposed tax reforms.”

For Mainoma, however, a reduction in the budget oil price benchmark will certainly affect government revenue and worsen the fiscal deficit.

 “Yes, certainly because it is going to affect the revenue of government. It will further push the deficits in the budget,” he said

On his part, Prophet Sam Olu lamented that despite repeated warnings from the government and concerned individuals, Nigerians continued to fall victim to fraudulent investment schemes.

He said, “Nobody will know when they are investing in the scheme, despite crying of hardship by some people, we can see trillions of naira that were lost to the scheme; how did they get the money? Where did the money come from?

“Someone who said he is jobless invested millions of naira in the scheme; where did they get it? Whoever always looks for free money will lose at last; why will you invest in a business you don’t struggle for? An overnight wealth will result in blame.”

He urged the government to do more for people to alleviate their suffering, saying people will not venture into a Ponzi scheme if there is employment to feed themselves.