₦316bn Ponzi Losses SEC

The Securities and Exchange Commission (SEC) has revealed that Nigerians have collectively lost about ₦316 billion to Ponzi schemes and unregistered fund managers, blaming greed and ignorance for the persistence of such fraudulent investments.

The disclosure was made by AbdulRasheed Dan-Abu, Head of the SEC’s FinTech and Innovation Department, during the Commission’s journalists’ academy in Abuja, where he presented a paper on tackling investment fraud.

Dan-Abu described Ponzi schemes as fake investment operations that pay old investors with money from new participants rather than through any real business activity. “These schemes do not generate any value; they merely circulate funds from new investors to earlier ones until the system collapses and the operators vanish,” he said.

He noted that the desire for quick wealth has led many Nigerians to fall victim, adding that even well-educated individuals are not immune. “Education has not cured greed. Many people still believe they can get rich overnight,” he lamented.

Citing examples, he recalled how MMM Nigeria promised up to 30% monthly returns, luring thousands before its collapse. Despite losing money, some victims reinvested after being deceived by follow-up scams. Another fraudulent scheme, New Nation, Women in Oil, disguised as a government-backed empowerment initiative, reportedly defrauded 155,000 rural women, many of whom sold their homes and cars to invest.

Data from the SEC presentation showed staggering losses across various schemes: investors lost ₦100 million each in Cow Lane and Durrell Nigeria Ltd, ₦235 million in Now-Now Alert, ₦400 million each in G-Circle Investment and Box Value Trading, and ₦900 million in Yuan Dong. Other notable cases included Dantata Success and Prof Coy (₦1.2bn,₦2bn), Famzi Intbiz (₦2.5bn), Bara Finance (₦3.5bn), Galaxy Construction and Transportation (₦7bn), and MMM Nigeria, which alone wiped out ₦18bn.

Furthermore, Nospecto Oil and Gas and other so-called wonder banks accounted for about ₦106.9bn, while the largest single case still under investigation involves losses exceeding ₦174bn. Altogether, The PUNCH’s analysis of SEC’s data places the total losses between ₦315.24bn and ₦316.04bn.

Interestingly, the list excluded Crypto Bridge Exchange (CBEX), a digital investment platform that allegedly scammed Nigerians of over ₦1.3 trillion.

Dan-Abu warned that Ponzi promoters often exploit social media platforms, forming WhatsApp groups and using flashy marketing tactics to deceive unsuspecting investors. “They promise high returns with little or no risk, but that’s a red flag no legitimate business operates that way,” he cautioned.

He urged Nigerians to verify any investment platform with the SEC before investing. “It’s your hard-earned money. If it’s not registered with the Commission, it’s already illegal,” he said, adding that journalists have a vital role to play in public enlightenment.

In his remarks, SEC Director-General, Dr. Emomotimi Agama, represented by Efe Ebelo, emphasized the need for strong regulation of digital assets to protect investors and sustain trust in Nigeria’s financial system. He stated that digital assets have become “a structural pillar of modern finance,” demanding transparency and accountability comparable to traditional markets.

“Regulation is not restriction,it builds trust and ensures innovation benefits society,” Agama noted.

He explained that Nigeria ranks among the top global adopters of digital assets, with over a third of the population involved in crypto-related activities. However, this rapid growth has also created avenues for scams and phishing attacks.

Agama highlighted the SEC’s 2022 digital asset rules, which introduced licensing requirements, anti-money laundering standards, and transparency measures for virtual asset service providers. He added that the SEC is collaborating with the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) to track illicit wallets, recover stolen funds, and deploy blockchain analytics to trace suspicious transactions.

He concluded that regulators must strike a delicate balance: “If we clamp down too hard, innovation moves offshore; if we go too soft, risks multiply. Our goal is to find the right equilibrium.”