Ponzi Schemes: Senate Set to Unravel the ills, bring Perpetrators to Book

The Nigerian Senate has set up an investigative panel into the operations of ponzi schemes and unregulated investment platforms in Nigeria, following the collapse of Crypto Bullion Exchange Civics, a fraudulent digital scheme that reportedly defrauded over ₦1.3 trillion from unsuspecting Nigerian citizens.

Motion was moved by Senator Mukhail Adetokunbo Abiru (Lagos East) and co-sponsored by Senator Osita Bonaventure Izunaso (Imo West), was  supported by lawmakers across party lines who raised alarm over the unchecked proliferation of financial frauds that continue to exploit poor and vulnerable Nigerians under the guise of investment opportunities

The motion, moved by Senator Mukhail Adetokunbo Abiru (Lagos East) and co-sponsored by Senator Osita Bonaventure Izunaso (Imo West), was unanimously supported by lawmakers across party lines who raised alarm over the unchecked proliferation of financial frauds that continue to exploit poor and vulnerable Nigerians under the guise of investment opportunities.

Speaking on the motion, Senator Abiru said it is one of the emerging trend of online Ponzi and pyramid schemes that use technology, social media, and even celebrity endorsements to lure Nigerians into investing in fraudulent ventures that promise exorbitant returns.

“These platforms are increasingly sophisticated. They use referral commissions, fake testimonials, and influencer-driven marketing to build trust among the masses,” Abiru said. “Many Nigerians, including students and low-income earners, lost everything. Some have been driven to depression, family collapse, and even suicide.”

He described the Civics scandal as “one of the most devastating financial scams in the country’s history,” and expressed shock that it was able to operate in full public view without any intervention from Nigeria’s key financial regulators, the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), the Economic and Financial Crimes Commission (EFCC), and the Nigerian Financial Intelligence Unit (NFIU).

The Lawmaker emphasized that while the Constitution empowers the National Assembly to investigate matters affecting national interest and citizen welfare, the regulatory agencies must be held accountable for failing to protect the Nigerian public from this massive financial crime.

Other senators expressed outrage over the recurring nature of Ponzi scheme collapses in Nigeria, dating back to MMM Nigeria in 2016 and MBA Forex in 2020.

Contributing, Senator Abdul Ningi (Bauchi Central) described the situation as a national tragedy and a failure of government oversight. “Rural dwellers, market women, artisans, students, people who struggle daily to survive, are the ones most affected. And all of this has been happening under the noses of our regulators,” Ningi said.

Senator Solomon Adeola (Ogun West) warned that Ponzi-style platforms are only one part of a broader wave of unregulated fintech and payment gateway frauds taking root in Nigeria.

He urged the Senate to question the CBN on what digital safeguards and frameworks it has instituted to oversee financial technology platforms.

The Senate agreed that the committees must not only investigate the frauds but also engage in zonal public hearings and education campaigns to enlighten Nigerians about the risks of online financial schemes and the importance of regulatory compliance.

Lawmakers warned that unless Nigerians are educated and regulators are held accountable, more lives and livelihoods will continue to be destroyed.