Nigerians Lose N316bn to Ponzi Schemes, SEC Warns Against Greed and Fake Investment Platforms

The Securities and Exchange Commission (SEC) has disclosed that Nigerians have collectively lost about ₦316 billion to Ponzi schemes and illegal investment platforms over the years. The regulator warned that greed and ignorance remain the major reasons why millions continue to fall victim. The Head of FinTech and Innovation Department at the SEC, AbdulRasheed Dan-Abu, made this revelation during a financial journalists’ academy in Abuja, where he spoke on strategies to combat investment fraud.

Dan-Abu explained that Ponzi schemes operate by paying old investors with funds collected from new entrants rather than any legitimate business activity. “These schemes are not doing anything productive,” he said. “Once there are no new investors, the system crashes, and the operators vanish.” He noted that the desire for instant wealth drives many Nigerians into these traps, despite increasing awareness and education about financial fraud.

The SEC official recounted the history of notorious scams, such as MMM Nigeria, which wiped out over ₦18 billion, and other fraudulent entities like Galaxy Construction, Famzi Intbiz, and Bara Finance, which collectively stole billions. The Commission’s analysis revealed cumulative investor losses between ₦315.24 billion and ₦316.04 billion from dozens of schemes, excluding some unverified digital platforms like Crypto Bridge Exchange (CBEX) that allegedly defrauded Nigerians of ₦1.3 trillion.

Dan-Abu further warned that most modern Ponzi operators exploit social media through WhatsApp and Telegram groups, promising unrealistic returns with little or no risk. He urged the public to verify any investment platform with the SEC before investing, emphasizing that “no genuine business guarantees huge profit without risk.” He also appealed to journalists to help create awareness, noting that media coverage can protect thousands of potential victims.

In his remarks, SEC Director-General Dr. Emomotimi Agama emphasized that while Nigeria embraces the digital finance revolution, investor protection must remain a top priority. Represented by the Head of External Relations, Efe Ebelo, he said digital assets are now “a structural pillar of modern finance” that must be regulated to build trust. Agama added that the Commission is collaborating with the CBN and EFCC to track and recover illicit funds, while ensuring innovation in the fintech sector remains ethical and transparent.

 source: Punch