The Securities and Exchange Commission (SEC) has revealed that Nigerians have been defrauded of approximately N316 billion through Ponzi schemes and unauthorized investment platforms over the years, attributing the persistence of these scams to widespread greed and lack of awareness.
Speaking at a capacity-building workshop for financial journalists in Abuja, AbdulRasheed Dan-Abu, Head of the SEC’s FinTech and Innovation Department, highlighted how these fraudulent operations function by using funds from new participants to pay returns to earlier ones, without any legitimate underlying business.
“When new inflows dry up, the system collapses, and the promoters vanish with the remaining capital,” Dan-Abu explained during his presentation on strategies to combat investment fraud.
He pointed out that the allure of quick riches continues to draw victims despite rising education levels. “The promise of immediate wealth overrides caution. Many fall prey because they want results today, not tomorrow,” he said.
Dan-Abu cited historical examples, including the infamous MMM platform, which offered 30 percent monthly returns and attracted thousands before its collapse. Remarkably, some affected individuals later paid additional fees in hopes of recovering frozen funds, illustrating how desperation can compound losses.
Another case involved a scam disguised as a government-backed initiative for rural women, which ensnared 155,000 participants who liquidated assets like homes and vehicles to join.
SEC data presented at the event detailed staggering losses across multiple schemes: N18 billion from MMM Nigeria; N106.9 billion from Nospecto Oil and Gas and similar “wonder banks”; N7 billion from Galaxy Construction and Transportation; and N3.5 billion from Bara Finance. Smaller operations included N100 million each from Cow Lane and Durrell Nigeria Ltd, and up to N2 billion combined from Dantata Success and Prof Coy.
The largest ongoing investigation involves a single entity suspected of misappropriating more than N174 billion. An independent review of the SEC’s figures places total verified losses between N315.24 billion and N316.04 billion.
The presentation noted that certain high-profile cases, such as the Crypto Bridge Exchange (CBEX) platform—allegedly responsible for over N1.3 trillion in losses—were not included in the tally.
Fraudsters increasingly rely on social media and closed messaging groups to promote unrealistic guarantees of high profits with minimal risk. “No legitimate venture delivers substantial gains quickly without corresponding dangers,” Dan-Abu stressed.
He advised the public to verify any investment opportunity with the SEC before committing funds. “If a platform isn’t registered with us, it’s operating illegally—full stop,” he warned, urging journalists to run weekly awareness pieces to reach vulnerable audiences.
SEC Director-General Dr. Emomotimi Agama, represented by Head of External Relations Efe Ebelo, emphasized the need for balanced regulation of digital assets amid Nigeria’s status as a global leader in cryptocurrency adoption, with over one-third of citizens engaged in related activities.
“Digital finance is now integral to the economy. Effective oversight protects users while allowing innovation to flourish,” Agama stated. He highlighted collaborative efforts with the Central Bank of Nigeria and the Economic and Financial Crimes Commission to trace illicit transactions and recover assets using advanced blockchain tools.
The SEC continues to enforce its 2022 digital asset rules, requiring licensing, anti-money laundering compliance, and transaction transparency for virtual asset providers.
Officials called for collective vigilance, warning that without sustained education and enforcement, fraudulent schemes will continue to exploit trust in Nigeria’s evolving financial landscape.
