![Young people are suffering - Senate orders probe of rising cost of data [Peoples Gazette]](https://image.api.sportal365.com/process/smp-images-production/pulse.ng/26092024/54ce82bb-23cf-44be-b0de-6dda907dd1bb?operations=autocrop(1042:580))
In April 2025 CBEX froze withdrawals and left thousands of investors unable to access over thirty billion naira. Senators found that the exchange never registered with the Securities and Exchange Commission, evaded routine inspections and misled customers with fabricated assurances.
The probe uncovered how unlicensed digital-asset platforms slip through cracks in existing laws, operate without real-time monitoring and exploit poor inter-agency cooperation.
By spotlighting these weaknesses the Senate has set in motion reforms aimed at reinforcing licensing, enhancing supervision and improving coordination among agencies tasked with safeguarding the public.
Inadequate licensing and registration checks
)
)
)
Digital-asset exchanges must register with the SEC and obtain necessary licences, yet CBEX launched and solicited deposits without any formal approval. Regulators lacked automated systems to verify new platforms against official records, allowing fraudulent operators to solicit funds under the radar.
ALSO READ: CBEX meltdown sparks renewed calls for financial vigilance among Nigerians
Weak ongoing supervision of emerging products
Unlike traditional banks subject to regular audits and on-site examinations, crypto platforms faced minimal oversight. CBEX transactions went unmonitored by the Central Bank and SEC, so warning signs, large deposit spikes, withdrawal delays and unusual transaction patterns, were never flagged for investigation.
)
Poor coordination among enforcement agencies
The EFCC, SEC and CBN operated in separate silos with no shared fraud-reporting database. Early intelligence on CBEX’s suspicious activities was not circulated across agencies, resulting in delayed investigations that only gained momentum once investor losses reached a tipping point.
EXPLORE: Ponzi scheme: 5 facts about CBEX digital trading platform
Limited enforcement powers and slow remedial action
Although the Investments and Securities Act grants the SEC authority to freeze assets and seek court injunctions, these powers were not deployed swiftly against CBEX’s promoters. Law enforcement agencies struggled with resource constraints, further delaying asset recoveries and eroding public confidence in rapid intervention.
Lack of mandatory consumer protection mechanisms
Investors had no access to compensation funds or guaranteed restitution when CBEX collapsed.
The probe recommended creating a dedicated Investor Protection Commission and requiring exchanges to hold client assets in segregated accounts, ensuring that customer funds cannot be commingled or lost in a platform failure.
The Senate’s findings demonstrate an urgent need for legislative updates, real-time surveillance tools and a centralised fraud-reporting network. Strengthening these areas will help prevent future collapses, restore trust in digital finance and position Nigeria as a leader in secure innovation.
RECOMMENDED: CBEX isn't The Last: How to detect the next Ponzi scheme in Nigeria