Advisory on Ponzi schemes in Nigeria

NIGERIAN FINANCIAL INTELLIGENCE NFIU INTEGRITY & DILIGENCE

NIGERIAN FINANCIAL INTELLIGENCE UNIT

ADVISORY NFIU/EXT/PUB/ADV/OFID-OFIA/APR-2025/VOL.2/001

UPDATE: ADVISORY ON PONZI SCHEMES AND OTHER UNREGULATED CROWDFUNDING SCHEMES

The Nigerian Financial Intelligence Unit (NFIU), In fulfilment of its obligations on the timely provision of guidance to Reporting Entities and Competent Authorities (CA), publishes Indicators and advisories on crimes of money laundering and terrorist financing in an effort to guide Reporting Entities and Competent Authorities on observable trends and patterns to mitigate AML/CFT/CPF threats

April 2025

Contents NFIU

1. Introduction.. 3

2. Digital Asset-Related Ponzi Schemes 4

2.1 Characteristics of Digital asset related Ponzi schemes:. 5

2.2 Case Studies of Digital Asset-Related Ponzi Schemes. 6

2.3 Red Flags and Indicators on Digital asset related Ponzi schemes. 8

2.4 Potential Digital asset-related Ponzi schemes Nigerians should be aware of. 9

3. Agric investment affiliated Ponzi Schemes. 10

3.1 Characteristics of agriculture investment related Ponzi schemes. 10

3.2 Case Studies on Agro-Ponzi Schemes.. 11

3.3 Red Flags and Indicators on Agro Ponzi Schemes 12

4. Generic Red Flags and Indicators of a Ponzi Scheme 12

5. Legal Framework against Ponzi Schemes in Nigeria 13

6. Recommendations 14

6.1 Recommendations for Regulatory Authorities. 14

6.2 Recommendations for Reporting Entities. 15

6.3 Recommendations for the Public. 15

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1. Introduction NFIU

In line with Section 3 (1) of the Nigerian Financial Intelligence Unit (NFIU) Act 2018, one of the functions of the NFIU is to advise the government, law enforcement and security agencies, supervisory authorities, and reporting entities on the prevention of Money Laundering, Terrorism Financing and Proliferation of weapons of mass destruction, and associated predicate offenses.

This advisory builds on a prior advisory issued by the NFIU about the dangers of Ponzi schemes and other unregulated crowdfunding schemes¹. The previous advisory highlighted the risks associated with fraudulent investment programs, warning Nigerians of the potential financial losses from schemes promising unrealistically high returns without regulatory oversight. In response to the surge in investment schemes between 2022 and 2025, this latest advisory aims to bring renewed attention to new patterns of Ponzi schemes within Nigeria. These investment schemes are disguised under different kinds of exciting names to mislead investors by promising high returns within short time frames. This promise of high returns is especially appealing to people in financial hardship, who may take irrational risks out of desperation or hope, making them more vulnerable to scams and more likely to ignore warnings from regulatory authorities2.

This update aims to raise stakeholder awareness about recent Ponzi-style schemes used to defraud the public and to remind financial institutions (Fls) and designated non-financial businesses and professionals (DNFBPs) of their obligations to mitigate such fraudulent activities.

The emerging trend in Ponzi schemes appears to center around digital assets, as most of the schemes flagged by law enforcement fall within this space. This development may be linked to the growing adoption of digital assets by Nigerians to promote financial inclusion and support commerce. Following digital asset- related schemes, the next most common types are sector-based investment schemes, particularly in agriculture and real estate. Most Ponzi schemes in Nigeria draw their characteristics from these key categories3.

1https://www.nfiu.gov.ng/AdvisoryAndGuidance?filePath=C%3A%5CNFIU%5Cwwwroot%5Cdocuments%5CAoPSao UCFS_COR9M3&fileName=Advisory%20on%20Ponzi%20Schemes%20and%20other%20Unregulated%20Crowd%20 Funding%20Schemes&handler=DownloadFile 2 https://www.youtube.com/watch?v=O0fyShh8YMA 3 https://www.efcc.gov.ng/efcc/news-and-information/news-release/10779-efcc-alerts-the-public-on-58-illegal- ponzi-scheme-operators

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2. Digital Asset-Related Ponzi Schemes

Ponzi schemes have evolved from traditional financial scams to sophisticated digital frauds. With the rise of blockchain technology and cryptocurrencies, fraudsters now use digital assets to exploit investors worldwide. These scams often promise high returns with little or no risk, relying on the influx of new investors to pay returns to earlier participants. With the rise of digital assets such as cryptocurrencies and tokens, Ponzi schemes have evolved into more sophisticated, borderless, and tech-enabled threats. A limited understanding of digital assets and its investment risks make investors susceptible to such schemes. Unlike traditional schemes, digital asset Ponzi schemes can be global, decentralised, and harder to trace. It is noteworthy that Nigeria dominates Africa's cryptocurrency adoption4 receiving over $ 59 billion in crypto between July 2023 and June 2024.5 The size of the Nigerian market puts it at risk of abuse by criminals. A limited

D Some of the Digital asset-driven Ponzi schemes noted in recent years include InksNation - a Fake humanitarian crypto scheme that used Pinkoin (fake crypto), MBA Forex - a False forex/crypto investment that used Bitcoin, Chinmark Group - a Multi-sector fake investment that used Bitcoin and Stablecoins, RackSterli - a Referral-based daily ROI scheme that used USDT and Bitcoin, and Clone Sites - Rebranded foreign Ponzi clones that used Tron and ETH tokens. The latest of these schemes is the Crypto Bridge Exchange (CBEX), which has its corporate name as ST Technologies International Ltd.

While blockchain is often touted for transparency, it also enables anonymity: Fraudsters can move illicit funds across wallets and exchanges with pseudonymity. Use of privacy coins complicates tracing. Decentralized Finance (DeFi) platforms can facilitate exit scams or yield-farming Ponzi-like setups.

Digital asset-based Ponzi schemes are growing in scale and sophistication. Governments, regulators, and FIUs must enhance surveillance and public awareness to mitigate their impact. Global coordination, coupled with blockchain forensics and stronger VASP regulation, is essential to curb the misuse of digital assets in fraudulent schemes.

4https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5095935 5 https://www.chainalysis.com/blog/subsaharan-africa-crypto-adoption-2024/

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2.1 Characteristics of Digital asset related Ponzi schemes:

Digital assets have become attractive tools for Ponzi scheme operators due to their anonymity, ease of transfer, limited regulation, and global accessibility. The schemes often adopt the following tactics:

a. Token-based Investment Programs: Fraudsters create and promote fake digital assets or tokens, often claiming they are backed by blockchain projects, Decentralised Finance (DeFi) platforms, or crypto mining operations. Investors are promised unrealistic returns for staking, holding, or referring others.

b. Crypto Arbitrage and Trading Bots: Some schemes claim to use artificial intelligence, trading bots, or cross-exchange arbitrage strategies to purportedly generate high yields from crypto markets. These claims are rarely verifiable and often mask Ponzi dynamics.

c. Referral or Multi-level marketing (MLM) Structures: Many digital Ponzi schemes use MLM models, in which users are incentivised to recruit others into the program, earning commissions from new deposits—a hallmark of classic Ponzi structures.

d. Use of Privacy Coins and Mixers: Operators may use privacy-enhancing digital assets or mixing services to obfuscate the source and flow of funds, complicating law enforcement tracing efforts.

e. Unregistered Investment and Unlicensed: The schemes and their perpetrators are most often not registered with or licensed by regulatory bodies like the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), or the Nigeria Insurance Commission (NAICOMМ). СВЕХ, for instance, was not registered by any of the 3 financial services regulators but was eager to highlight registration with non-related authorities.

f. Use of Complex Technical Terms: The rampant use of trendy buzzwords to increase opaqueness and sophistication. Examples like Al (Artificial Intelligence) and ML (Machine learning schemes), signals, etc, but at the same assuring ease of trading relying on Digital assets to address all technicalities. In the case of CBEX, the fraudsters claimed the use of Al Algorithms to generate high trading returns with accuracy, with users required to follow periodic signals to trade.

g. False Representation: Scammers in the Digital asset space place emphasis on being affiliated with reputable entities or authorities for validation and to build public confidence.

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2.2 Case Studies of Digital Asset-Related Ponzi Schemes

Case Study 1 - CBEX Investment Fraud

Crypto Bridge Exchange (CBEX) operated under the corporate identity of ST Technologies International Ltd. Neither CBEX nor its affiliates were granted registration by the Securities and Exchange Commission (SEC) at any time to operate as a Digital Assets Exchange, solicit investments from the public or perform any other function within the Nigerian capital market. CBEX made an outrageous promise of a 100% return on investment in just 30 days. CBEX used three (3) specific deposit wallet addresses identified as receiving funds from Nigerian victims. Illicit proceeds were funnelled into intermediary wallets (funnel addresses), used to obscure the source of funds. The obfuscation technique identified is the use of Bridges to move the funds from the Tron blockchain to the Ethereum blockchain, using the “Bridgers” service. A crypto bridge is a protocol or service that facilitates the transfer of digital assets between two distinct blockchain networks. It allows interoperability where direct transactions wouldn't be possible due to differing technical architectures. It acts as a connector, enabling users to move crypto assets between different blockchains. The flow culminated in centralised exchanges (CEXs), presumably for cash-out or further laundering. (CBEX) Ponzi Scheme reportedly resulted in the loss of over #1.3 trillion in investor funds.

Case Study 2 - Chinmark Group Ponzi Scheme

Chinmark marketed itself as a conglomerate engaged in: Real estate, Logistics (Chinmark Haulage), Agriculture, Hospitality, Healthcare (Chinmark Medical), Projected an image of religious values, philanthropy, and youth empowerment. Built investor trust through Instagram, Facebook, and endorsements by social influencers. It promoted fixed investment packages with monthly Return on Investment (ROI) of 3% to 4%. Investment amounts ranged from #100,000 to #10 million or more. Accepted Bitcoin (BTC) and USDT (Tether), especially from Nigerians in the diaspora. Used crypto OTC agents to convert digital assets to naira. Promised international investors seamless entry and exit using crypto channels.

Chinmark claimed investor funds were used for asset-backed businesses, particularly in haulage and real estate. Payments of ROI were consistent in the early stages (Ponzi-style). Encouraged compounding (reinvesting returns) and referrals, increasing exposure. Relied heavily on social proof: photos of trucks, medical centres, buildings many of which were not verified or functional. By late 2021, ROI payments began to be delayed, triggering panic. Investors were

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told to be patient due to "cash flow issues." Allegations arose of: Non-existent haulage contracts, Misappropriation of funds, Using new investor money to pay old ones classic Ponzi behaviour. Thousands of investors lost money some reports suggest over #10 billion in total. Many investors formed victim groups and filed petitions with Law Enforcement Agencies.

Chinmark was not licensed by SEC Nigeria (for investment fund management) and CBN (for accepting deposits). It operated in a legal grey area, leveraging branding, faith narratives, and crypto channels to bypass scrutiny.

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2.3 Red Flags and Indicators on Digital asset related Ponzi schemes6

a. Unrealistic or Guaranteed Returns: Promises of fixed daily, weekly, or monthly ROI, e.g., “5% daily for life” or “15% or more monthly return.” Claims like "your money works for you 24/7 with zero risk.” It is suspicious because legitimate investments tied to market performance cannot guarantee consistent high returns, especially with crypto volatility.

b. Lack of Regulatory Licensing or Oversight: There is no evidence of registration with financial regulators (e.g., SEC, CBN). The platform claims to be "decentralised” or “beyond regulation.” All platforms handling investments or digital assets for others must comply with local regulations.

c. Overemphasis on Referrals and Affiliates: Income is primarily earned from recruiting new investors, not from actual product or trading activity. Referral bonuses or commissions for every new investor brought in. Classic pyramid and Ponzi structures rely on continuous recruitment to fund payouts.

d. Opaque Business Model: Vague explanations of how profits are generated (e.g., "Al-driven crypto trading” or “quantum blockchain technology” with no evidence). No whitepaper, audited financials, or identifiable fund managers. It is a red flag because transparency is a hallmark of legitimate financial operations.

e. Use of Newly Created or Unknown Tokens: Platform issues its own token (e.g., "XToken” or “Pinkoin”) with no market value or external exchange listing. Promotes speculative token value without utility or governance model. Many Ponzi schemes mint fake tokens to simulate value and lure victims.

f. Fake Partnerships and Credentials: False claims of affiliations with International Organisations like the United Nations, World Bank, Binance, Coinbase, etc. Fabricated endorsements by celebrities or government officials. Ponzi schemes often borrow credibility to seem legitimate.

g. Pressure to Act Quickly: Limited-time offers, countdown clocks, or “investment windows” that push urgency. Fear-of-missing-out (FOMO) tactics like "Top 100 users get double ROI!”. This discourages due diligence and encourages impulse investment.

6 FATF, "Virtual Assets Red Flag Indicators of Money Laundering and Terrorist Financing", 2020

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h. Restricted Withdrawals or Locked Funds: Withdrawal delays, system "upgrades," or token “vesting periods.” Payouts are only allowed after recruiting others or “reinvesting profits.”. Classic stalling tactics are used to keep the scheme running longer. In the case of CBEX, by early April 2025, withdrawal issues surfaced, with the platform citing a "security breach" or demanding "verification fees" to access funds.

i. Operates Primarily on Social Media or Messaging Apps: Platforms are promoted heavily on WhatsApp, Telegram, Instagram, or Facebook with minimal web presence. Community moderators aggressively block or dismiss complaints. Scammers use social media to bypass regulatory visibility and spread faster.

j. No Independent Audits or Blockchain Transparency: Claims to be "on the blockchain" but provides no smart contract audits or transaction explorers. Uses blockchain language to confuse non-technical investors. True blockchain platforms are verifiable and auditable.

k. Use of Shell Companies: CBEX has not operated with the true nature of its business model, it operated through entities like Smart Treasure and Super Technology, that were also not registered as digital trading platform to defraud unsuspecting victims.

2.4 Potential Digital asset-related Ponzi schemes Nigerians should be aware of.

a. eWealth Connect (EWC) is a decentralised, community-driven platform built on the Solana blockchain, designed to revolutionise digital asset trading through peer-to-peer (P2P) auctions. Launching in Q4 2024, it offers features like dual daily trading sessions, transparent pricing, and real-time settlements, with a focus on emerging markets like Nigeria. The platform's native EWC token provides utility such as reduced fees, governance rights, and exclusive trading benefits. EWC emphasizes community empowerment, allowing users to participate in platform development and governance while offering tiered investment packages with projected returns. Despite its ambitious roadmap, including international expansion and NFT integration, the platform's sustainability and regulatory compliance remain to be tested, warranting cautious evaluation by potential users

b. WWCoin (aka TOFRO) is a newly launched trading platform (as of October 2024) that offers daily trading signals, deposit bonuses, and promises high

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returns (1% profit per signal, totaling 6% daily). Key features include a minimum deposit of $100, withdrawal fees (20% before doubling funds, 10% after), and extra signals for larger deposits. However, the platform raises significant red flags, such as unrealistic profit claims, high withdrawal fees, lack of regulatory transparency, and aggressive deposit incentives, all common traits of Ponzi schemes or high-risk scams.

c. Delux is a platform designed to help users monetise their online activities, particularly through social media engagement (like TikTok), content creation, and completing daily tasks. It promotes financial freedom by offering flexible earning opportunities, such as referral rewards, task-based income, and content monetisation, with an emphasis on simplicity and accessibility. While it targets students, freelancers, and creators, users should verify its legitimacy, payment proofs, and terms to ensure it's not a pyramid scheme or scam. Always research before investing time or money.

d. ADK is a high-risk investment and betting platform that profits through a 9% withdrawal fee and investor losses, particularly targeting users in regions without compensation agreements. It operates with a multi-level agent system (e.g., Junior/Gold Agents) where earnings depend on recruitment and trading losses, while advertising a deceptive 97% win rate that hides low-profit margins. With its reliance on unsustainable recruitment rewards and selective protections, ADK exhibits strong red flags of a potential Ponzi scheme or scam, making it a dangerous platform for investors.

3. Agric investment affiliated Ponzi Schemes

Agriculture Ponzi schemes are fraudulent investment operations that deceive the general public with a promise of high returns based on claiming to invest in various agricultural activities or products. These returns bear no alignment with the cyclical circle of agriculture produces but rather rely on paying return to earlier investors based on inflows from by newer investors.

The agriculture Ponzi schemes became wide spread in Nigeria from 2022 to date. Some of the agriculture Ponzi schemes include Farmforte Ltd & Agro Partnership Tech, Green Eagles Agribusiness Solution Ltd, Farm4Me Agriculture Ltd, Crowdyvest Ltd, West Agro Agriculture & Food Processing Ltd, 360 Agric Partners Ltd etc.

3.1 Characteristics of agriculture investment related Ponzi schemes

a. Unrealistic Returns: They often promise investors with exceptionally high and guaranteed returns that are not feasible through normal agricultural

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practices or market conditions. Example is a scheme that might promise a 50% return in a few months on an investment in a rice farm or livestock.

b. Complex or Vague Business Models: The actual agricultural activities are often vaguely described or made to sound overly complex, most time de- emphasized therefore making it difficult for investors to understand how the promised returns are generated. There might be buzzwords like innovative farming techniques, rare crops, or lucrative export deals without concrete details.

c. Emphasis on Referrals/Recruitment: Like all pyramid schemes, Ponzi schemes often incentivize early investors to recruit new participants, as the influx of new funds is essential to keep the scheme afloat and pay out the promised returns

d. Lack of Transparency in fundamentals: There is typically an opaqueness around the actual farming operations, financial statements, and how the investors' money is being used. Investors may not receive regular or verifiable updates on the progress of the supposed agricultural projects.

e. Unusual use of Social Proof and Testimonials/Influencers: Schemers often rely on testimonials from seemingly satisfied early investors or endorsements from influential figures to create an illusion of legitimacy and trustworthiness.

f. Limited offer/Pressure to Invest Quickly: Potential investors may be pressured to make quick decisions due to "limited-time offers" or the fear of missing out on a lucrative opportunity.

3.2 Case Studies on Agro-Ponzi Schemes

Case Study 3

Mr. M operates a corporate account at the bank, listing his business as trading in agricultural products. On September 7, 2023, a payment of N500,000 was made into the account by a customer, Jane Doe. Following complaints from other customers alleging fraudulent activities linked to Ponzi-like transactions, the bank conducted a review of the account. It was found that the account had processed N402,779,291.64 in credits and N402,779,102.52 in debits over the past six months. Further investigation revealed that Mr. M frequently receives deposits from multiple sources, labeled as "Investments," and makes daily disbursements to various recipients, often noted as "Incentives." This activity pattern raised suspicions that Mr. M may be operating a Ponzi scheme.

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Additionally, two customers formally complained to the bank, stating that their deposits were made with the expectation of a 16% monthly return, which was ultimately fraudulent.

Case Study 4

Mr. Peter Parker and his companies RP Global Limited and AP Limited deal in agriculture promising profitable investments in agricultural export ventures. In June 2023, one Mr. ABC Investment Limited invested N300,000,000. With the company which was to be transferred to investors in China, after some time and aggrievances the matter was taken to the Economic and Financial Crimes Commission (EFCC). Investigations revealed that Mr. Paul Peter used money to purchase a luxury house in Lagos.

Peter Parker was arraigned by the Lagos Directorate of the EFCC on August 19, 2024, for 11 charges of obtaining by false pretenses and stealing over N600 million and $50,000. He pleaded not guilty and was ordered to remain in EFCC custody for ongoing investigations.

3.3 Red Flags and Indicators on Agro Ponzi Schemes

a. High and unusual volume and turnover

b. Frequent Deposits from Multiple Sources

c. Unsustainable promised returns

d. Lack of consistent business purpose as the account does not align with stated business purpose.

e. Customers (Investors) Complains.

f. Difficulty in receiving promised returns on investment

4. Generic Red Flags and Indicators of a Ponzi Scheme

a. Promising unusually high returns on investments with no commensurate operational fundamentals.

b. Entity having no operating license from SEC, CBN nor NAICOM.

c. Use of attractive referral schemes to recruit new investors to keep the scheme operational.

d. Paying earlier investors using funds from new participants (i.e., taking from Investor C to pay Investor A).

e. Providing frequent updates on supposed interest or capital gains to maintain investor confidence.

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f. Highlighting testimonials from individuals who claim to have profited, often spread through social media or personal networks and use of influencers for visibility.

g. Encouraging continuous reinvestment to ensure the scheme's continuity.

h. A preference to operate outside registered/licensed VASP

i. Highly Complex, Secretive, or Difficult to Understand Business Model

j. Lack of Transparency and Excuses or Delays with Information and Paperwork

k. Bank account that receives investment inflows without any commercial substance

l. Banks accounts that transact with exchanges that are not registered with SEC

m. High Inflow Volume without Clear Revenue Model: A high volume of small, anonymous inflows with no underlying service or product signals typical layering and integration stages in money laundering.

5. Legal Framework against Ponzi Schemes in Nigeria

As at 2022, the ISA 2007, and BOFIA 2020 were presented as relevant legal frameworks against Ponzi schemes In Nigeria. However, the development and integration of digital assets in the Nigeria commercial space has necessitated the strengthening of laws to recognize, register and regulate digital assets. The Investment and Securities Act (ISA) 2025, repealed ISA 2007, legalizes digital assets and give SEC the oversight powers over same. The law places more sanctions on promotion of Ponzi schemes including a minimum fine of N20m or 10 years in prison or both. Some relevant sections of ISA 2025 provide as follows:

a. Section 3(2)(a)-(c) saddles the Securities and Exchange Commission (SEC) with responsibility of ‘protection of investors, protect market integrity, prevent illegal and unlawful fraudulent practices relating to securities and investment.

b. Section 3(3)(a)-(b)(g) gives SEC the role to regulate investment and securities business in Nigeria, register and regulate all securities offered to the public, including collective investment schemes.

c. Section 3(4) grants the SEC several powers to carry necessary action in the achievement of its objectives

d. Section 26(1) provides that SEC has the responsibility to register Securities exchange (and this includes Virtual assets Service providers)

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e. Section 86(1) provides SEC with the power to register securities (including Virtual Asset) issued under the Act

6. Recommendations

6.1 Recommendations for Regulatory Authorities

1. Implement Licensing on operators of VASP: Enforce licensing requirements and more public awareness on licensed entities.

2. Create a central database of licensed VASP and other investment schemes that is accessible to the general public.7

3. Adopt collaborative approach with other authorities which will allow sharing of information on non-registered schemes

4. Enforce prevention and disruption of the operation of non-registered Ponzi scheme through field intelligence and information sharing.

5. Adopt advanced RegTech systems that use artificial intelligence and machine learning to detect fraud patterns, monitor transactions, and raise alerts automatically.

6. Develop a centralized fraud alert portal that publishes red-flagged platforms, suspensions, and ongoing investigations in real-time.

7. Create a publicly funded Investor Protection Fund, financed by a levy on licensed digital investment firms, to compensate verified victims of collapsed schemes.

8. Strengthen digital asset legislation, with clear definitions of permissible operations, penalties for non-compliance, and data-sharing mandates for regulatory bodies.

9. Launch digital innovation sandboxes, where startups can test products under regulatory supervision before launching to the general public.

10. Increase Public Awareness: Launch campaigns to educate investors about the dangers of Ponzi schemes and how to recognize red flags.

11. Whistleblower Incentives Expand programs to encourage reports of suspicious activity.

12. Monitor Unregulated Platforms: Increase oversight of online and digital investment platforms, especially in cryptocurrencies.

13. Enhance Collaboration: Between SEC, law enforcement, and international agencies to investigate and shut down Ponzi schemes.

14.Enforce KYC/AML Compliance: Tighten Know-Your-Customer (KYC) and Anti-Money Laundering (AML) rules to prevent fraudsters from using financial systems.

7 https://nigerianewssource.com.ng/2025/04/22/cbex-collapse-and-the-fragility-of-nigerias-financial-oversight-a- call-for-urgent-policy-reform/

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15. Enforce customer due diligence (CDD) and a transaction monitoring system is put in place by reporting entities

16. Issue Public Alerts: Regularly warn the public about ongoing scams and provide consumer protection support for victims.

6.2 Recommendations for Reporting Entities

1. Strengthen KYC: Enhance customer due diligence and continuously monitor accounts for suspicious activity.

2. Review transactions related to investment against SEC database to determine that operators are registered

3. Implement Transaction Monitoring: Use Al tools to detect and flag unusual transactions linked to Ponzi schemes and other related investment frauds.

4. Collaborate with Authorities: Report suspicious activities to regulators and work with law enforcement to address fraud.

5. Educate Customers and Staff: Raise awareness about Ponzi schemes through customer campaigns and employee training.

6. Restrict High-Risk Transactions: Avoid processing payments to unregistered or suspicious investment platforms.

7. Enhance AML Compliance: Enforce stricter Anti-Money Laundering controls to detect fraudulent funds.

8. Protect Customers' Funds: Freeze suspicious accounts and assist in refunding victims.

9. Monitor New Accounts: Prevent fake or duplicate accounts used to facilitate Ponzi schemes.

10. File STRs in cases where transaction involves unregistered schemes with the NFIU

6.3 Recommendations for the Public

1. Verify Registration: Always confirm that the investment company is registered with the SEC Nigeria. Use the official SEC list to ensure legitimacy.

2. Ask the Right Questions: Be curious. Ask where your money is going, how profits are made, and what products or services are involved. Legitimate businesses can provide clear answers.

3. Beware of Unrealistic Promises: Be cautious of schemes offering very high returns in a short period. If it sounds too good to be true, it probably is.

4. Don't Rely on Testimonials Alone: Personal stories and glowing reviews can be faked or paid for. Always do independent research before investing.

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5. Report Suspicious Activities: If you suspect a Ponzi scheme, report it immediately to the SEC, the EFCC, or the Nigerian Police Force (NPF).

Reporting entities must remain vigilant and uphold their obligation to file Suspicious Transaction Reports as stipulated in Section 7 of MLPPA for any activity that suggests involvement in Ponzi schemes or other fraudulent investment operations. It is imperative that these entities report any suspicious transactions promptly, as failure to do so undermines the efforts to prevent money laundering and protect the financial system. The NFIU emphasizes that non-compliance with these filing requirements will not be tolerated, and entities that neglect their duties risk severe penalties and reputational damage. The timely submission of STRs is crucial in the fight against financial fraud and criminal activities in the country.

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