The Securities and Exchange Commission has said Nigerians have lost about ₦316bn to Ponzi schemes and illegal fund managers over the years, warning that greed and ignorance are sustaining the menace.
The Head of FinTech and Innovation Department at the Commission, AbdulRasheed Dan-Abu, disclosed this at a journalists’ academy, a training organised by the commission for finance journalists, in Abuja, while presenting a paper on combating investment fraud.
He described Ponzi schemes as fraudulent investment operations that pay returns to old investors from money collected from new entrants rather than from any genuine business activity.
“These schemes are not really doing anything. They are just collecting people’s money and using it to pay the initial investors. At some point, when there are no new investors, the whole thing crashes and the operators disappear,” he said.
According to him, the desire for instant wealth has made many Nigerians fall victim.
“Everybody just wants to get rich today. That is actually what makes people fall into this trap,’ he noted. ‘Even the people who are greedy now are more educated than those who experienced Charles Ponzi’s first scheme. Education has not stopped greed.”
Dan-Abu recalled how notorious schemes such as MMM Nigeria lured thousands with promises of 30 per cent monthly returns. He said some victims even reinvested after the collapse.
“Even after MMM shut down, they came back and told people that if you pay a certain amount, you will get access to your lost money. People still paid. That shows you how greed blinds people,” he said.
He also recounted how a fraudulent scheme called New Nation, Women in Oil disguised itself as a government-endorsed empowerment programme and trapped 155,000 rural women.
“Many sold their houses and cars to invest because they believed it was real. It tells you how dangerous this thing is when people do not ask questions,” he said.
The SEC presentation showed that investors lost ₦100m each in Cow Lane and Durrell Nigeria Ltd, ₦235m in Now-Now Alert, ₦400m each in G-Circle Investment and Box Value Trading, and ₦900m in Yuan Dong.
Dantata Success and Prof Coy accounted for between ₦1.2bn and ₦2bn, Famzi Intbiz swallowed ₦2.5bn, while Bara Finance cost ₦3.5bn.
Galaxy Construction and Transportation took over ₦7bn, and MMM Nigeria wiped away ₦18bn.
Nospecto Oil and Gas and other so-called wonder banks consumed ₦106.9bn, while the single biggest case still under investigation is put at more than ₦174bn.
Altogether, the total losses were estimated at between ₦315.24bn and ₦316.04bn based on a thorough analysis by The PUNCH of the data contained in the presentation document.
However, The PUNCH observed that the list of Ponzi schemes excluded Crypto Bridge Exchange, popularly known as CBEX, a digital investment platform that allegedly fleeced Nigerians of over ₦1.3tn.
Dan-Abu stressed that many of the operators exploit aggressive marketing on social media platforms, forming WhatsApp groups and luring unsuspecting investors with promises that look too good to be true.
‘They promise high returns with little or no risk. But there is no business in the world where you can make a lot of money in a short time without risk. It is not possible,’ he said.
He urged investors to always check with the Commission before committing funds. ‘Anytime you see an investment that looks new, the first thing you should do is ask if it is registered with the SEC. It is your sweat, your hard-earned money. If it is not registered, it is already illegal,’ he warned.
Dan-Abu also appealed to journalists to support the campaign against Ponzi schemes. ‘The press can really help us. If you write about this once a week, you could save thousands of people. Tomorrow, it might be your son, your cousin or your neighbour. It is not about foolishness; it depends on who the victim spoke to and what he believed,’ he said.
He concluded that only vigilance and collaboration can stop the scourge.
In his remarks, the Director-General of the Commission, Dr Emomotimi Agama, said Nigeria cannot afford to lag in regulating digital assets, insisting that robust oversight is critical to protect investors and build trust in the financial system.
Represented by the SEC’s Head of External Relations, Efe Ebelo, the commission’s DG said digital assets were no longer a fringe experiment but had become ‘a structural pillar of modern finance’ that demanded the same level of transparency, accountability and investor protection as traditional markets.
“Regulation is not about restriction; it is about building trust, ensuring that innovation serves progress and not predation,” Agama said.
He noted that Nigeria ranked among the world’s top adopters of digital assets, with more than a third of the population involved in crypto-related activity, but warned that the rapid growth had also created fertile ground for scams, phishing attacks and fake wallet applications.
According to him, the SEC’s 2022 rules on digital assets set out a framework for virtual asset service providers, anchored on licensing, compliance with anti-money laundering standards, and transparency in monitoring transactions.
He said the Commission was working with the Central Bank of Nigeria and the Economic and Financial Crimes Commission to freeze illicit wallets and recover criminal proceeds, while also deploying blockchain analytics tools to trace suspicious transactions.
“Worldwide, regulators face the same paradox. Clamp down too hard and innovation migrates offshore; regulate too softly and systemic risks multiply. Our duty is to strike the right balance,” he said.
Agama stressed that the future of finance was digital, but must remain ethical, transparent and trustworthy.
“In this new frontier of finance, trust is the ultimate currency and as regulators, our highest duty is to preserve it,” he added.
Credit: punchng.com
