KEY POINTS
- Nigerians have lost over ₦316bn to Ponzi schemes.
- SEC blames greed, ignorance, and fake online investment platforms.
- Regulator vows tighter oversight of digital assets and crypto operators.
The Securities and Exchange Commission (SEC) says Nigerians have lost an estimated ₦316 billion to Ponzi schemes and illegal fund managers over the years, warning that greed and ignorance are fueling the menace.
The Head of the SEC’s FinTech and Innovation Department, AbdulRasheed Dan-Abu, disclosed this in Abuja at the SEC Journalists’ Academy, where he presented a paper on combating investment fraud.
He described Ponzi schemes as fraudulent operations that use funds from new investors to pay old ones, rather than any legitimate business activity.
“These schemes are not doing anything productive,” Dan-Abu said. “They collect people’s money, pay the first set of investors, then crash once new inflows stop.”
He added that the desire for instant wealth remains the biggest trap. “Education has not stopped greed,” he noted. “Even well-informed people fall for these schemes.”
Ponzi operators exploit social media, fake empowerment drives
Dan-Abu cited notorious cases like MMM Nigeria, which promised 30 percent monthly returns, and New Nation Women in Oil, a fake empowerment program that trapped over 155,000 rural women.
“Many sold their homes and cars to invest,” he said. “That’s how dangerous this becomes when people don’t ask questions.”
According to SEC data, victims lost billions across multiple schemes:
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Galaxy Construction & Transportation: ₦7bn
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MMM Nigeria: ₦18bn
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Nospecto Oil & Gas and wonder banks: ₦106.9bn
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Dantata Success & Prof Coy: ₦1.2bn–₦2bn
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Famzi Intbiz: ₦2.5bn
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Bara Finance: ₦3.5bn
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Other schemes (Cow Lane, Now-Now Alert, G-Circle): ₦100m–₦900m each
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Largest case under probe: over ₦174bn
A PUNCH analysis of SEC data put total investor losses between ₦315.24bn and ₦316.04bn.
However, Dan-Abu’s presentation did not include Crypto Bridge Exchange (CBEX), a digital platform accused of defrauding Nigerians of ₦1.3 trillion, suggesting the total losses could be much higher.
Regulator pushes for vigilance and tighter digital oversight
Dan-Abu warned that operators now use WhatsApp groups, social media ads, and influencer marketing to lure victims with unrealistic returns.
“They promise high profit with no risk that’s the first red flag,” he said. “No real business can guarantee quick, risk-free returns.”
He urged investors to verify every investment with the SEC before committing funds.
“If it’s not registered, it’s already illegal,” he said. “It’s your sweat, your money protect it.”
He also appealed to journalists to help raise awareness. “If you write about this once a week, you could save thousands,” he said. “Tomorrow, the victim could be your neighbour.”
SEC vows tougher digital asset regulation
SEC Director-General, Dr. Emomotimi Agama, said Nigeria cannot afford to lag in regulating digital assets, stressing that robust oversight is vital for investor protection and financial stability.
Represented by Efe Ebelo, Head of External Relations, Agama said, “Regulation is not about restriction; it’s about building trust and ensuring innovation serves progress, not predation.”
He noted that over a third of Nigerians engage in crypto-related activity, but the boom has created space for scams and fake wallets.
Agama said the SEC’s 2022 digital asset rules require virtual asset providers to obtain licenses, follow anti-money laundering (AML) protocols, and maintain transparent records.
He added that the Commission is working with the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) to freeze illicit wallets, recover stolen funds, and use blockchain analytics tools to trace suspicious transactions.
“Clamp down too hard and innovation moves offshore,” Agama said. “Regulate too softly and risks multiply. Our duty is to strike the right balance.”
He concluded, “The future of finance is digital, but it must also be ethical, transparent, and trustworthy. In this new frontier, trust is the ultimate currency.”
