SEC Nigeria Warns Investors After CBEX Collapse
The Securities and Exchange Commission of Nigeria (SEC Nigeria) has issued a warning to investors about unregistered cryptocurrency platforms, following the collapse of CBEX. The digital asset trading platform's failure has left investors in Nigeria and Kenya unable to retrieve their funds, resulting in losses exceeding N2.4 billion ($1.48 billion).
CBEX, founded by an unknown entity, was not registered or authorized to operate by the SEC. The commission has postponed issuing new provisional licenses to cryptocurrency startups due to further due diligence needs. Investors are urged to confirm the registration status of financial institutions via the SEC's official database to avoid such incidents.
The SEC Nigeria has emphasized the importance of regulatory compliance for capital market integrity. The newly enacted Investments and Securities Act, 2025 criminalizes the promotion and operation of unregistered investment schemes, with severe penalties for violators. The commission has warned investors about fraudulent investment schemes like Ponzi schemes and unauthorized digital asset platforms advertising misleading investment offers with high, guaranteed returns and minimal risk.
The collapse of CBEX serves as a reminder of the dangers of investing in unregistered platforms. The SEC Nigeria's warning and the new regulatory framework aim to protect investors and maintain integrity in the capital market. Investors are advised to carry out due diligence and ensure they invest only in registered and approved platforms.
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