Another wave of financial loss has hit unsuspecting Nigerians as the CBEX app, a fraudulent investment platform, has disappeared with users’ money. This app, like many others before it, operated under the classic model of a Ponzi scheme, deceiving people with promises of high and quick returns. Many are left heartbroken, some in debt, all victims of a predictable but preventable scam.
Understanding Ponzi Schemes Like CBEX
Ponzi schemes are fraudulent investment operations where returns are paid to earlier investors using the capital of newer investors, rather than from profit earned by the operation of a legitimate business. Eventually, when new investments dry up, the scheme collapses, leaving the majority of participants with losses.
CBEX fits this model perfectly:
• Promised unrealistic daily or weekly returns.
• No identifiable product, service, or blockchain utility.
• Required referrals to boost earnings — a red flag in many scams.
• Operated without transparency or regulatory oversight.
How to Identify Ponzi Schemes
Watch for these warning signs:
• Guaranteed high returns with little or no risk.
• Lack of a clear business model or tangible product.
• Pressure to recruit others to earn rewards.
• Unverifiable team or leadership.
• No licensing or regulation by financial authorities.
• Vague or constantly changing explanations of how profits are generated.
Not All Projects Are Scams: Bitcoin and Pi Network Compared
While Ponzi schemes like CBEX prey on ignorance and desperation, not all new technologies or platforms are fraudulent. Let’s compare with two examples that are not scams but are often misunderstood:
Bitcoin
• Open-source, decentralized, and fully transparent.
• Based on blockchain technology, with a fixed supply and verified use cases.
• Traded globally and recognized as digital gold.
• Operates without a central authority or promises of guaranteed returns.
Pi Network
• A mobile mining project aiming to build a digital currency with real-world utility.
• Still in development (Mainnet phase for some users), with no money required to join.
• Does not ask for investment or payments to earn coins.
• Has a growing ecosystem, but still requires caution as it hasn’t fully matured.
How to Identify Credible Projects
Before committing your time or money to any project, do the following:
1. DYOR – Do Your Own Research: Understand the team, whitepaper, goals, and tokenomics.
2. Check community presence: Credible projects have open communities on platforms like Discord, Twitter, or GitHub.
3. Look for regulation or licensing: Especially for investment platforms or exchanges.
4. Avoid urgency and hype traps: If you’re being rushed to invest, it’s likely a scam.
5. Use trusted sources: Verify reviews, search for scam warnings, and consult experienced crypto communities.
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Conclusion
The CBEX scam is a painful reminder that greed and lack of due diligence are dangerous companions. While innovations like Bitcoin and even experimental projects like Pi Network represent the future of decentralized technology, scammers are quick to imitate their language and style to lure victims. Let’s stay vigilant, ask the right questions, and educate ourselves and our communities.
Prof. AA
