CBEX: 7 critical signs to spot and avoid Ponzi scheme

• Ponzi schemes person robbed a batch of Nigerians of their hard-earned wealth and wrecked galore businesses and homes
• Unfortunately, they don't contiguous arsenic Ponzi schemes erstwhile requesting investments from would-be investors
• To debar losing your hard-earned wealth to these fraudsters, these are the apical 7 captious signs to ticker retired for

Legit.ng writer Victor Enengedi has implicit a decade's acquisition covering Energy, MSMEs, Technology, Banking and the Economy.

In yet different lawsuit of a Ponzi scheme, investors were near stunned arsenic they discovered the abrupt disappearance of their funds invested successful Crypto Bridge Exchange Smart-Treasures (CBEX).

Marketed arsenic an artificial intelligence-powered cryptocurrency trading platform, CBEX promised users the accidental to bargain and merchantability integer assets, guaranteeing "100 per cent returns each month."

Marketed arsenic an artificial intelligence-powered cryptocurrency trading platform, CBEX promised users the accidental to bargain and merchantability integer assets, guaranteeing "100 per cent returns each month."

What was erstwhile advertised arsenic a lucrative concern accidental has present been exposed as a fraudulent scheme.

CBEX: Top 7 Signs to Spot a Ponzi Scheme Before You Are Scammed
Source: UGC

What is simply a Ponzi scheme?

Ponzi schemes are unverified concern platforms that committedness investors precocious and mouth-watering interests connected their investments.

The sanction comes from Charles Ponzi, a 1920s notorious fraudster who operated a strategy wherever helium promised investors a 40% instrumentality connected their investments successful 90 days until its last crash.

Ponzi schemes' endurance is babelike connected a changeless travel of caller capitalist money which is utilized to wage existing investors portion small to nary existent investing is going on.

Nigeria’s affluent past of Ponzi schemes

The Mavrodi Mundial Movement (MMM) volition possibly stay the astir fashionable of these Ponzi schemes that person ever operated successful Nigeria. So galore Nigerians were victims of these schemes and truthful overmuch wealth was mislaid erstwhile the strategy yet crashed successful 2017. According to the Central Bank of Nigeria, investors mislaid astir N12 cardinal to MMM.

Even aft the clang of MMM, you would deliberation that galore would larn their lessons. But no, much radical look to person shifted to patronising newer illicit schemes, repeating the aforesaid cycle.

From MMM to Loom; Ultimate Cycler to Givers Forum; Pennywise to Twinkas; Clarrita to Loopers Club, the database is endless. They travel nether the guise of offering outrageous Returns connected Investment.

According to an earlier study by Legit.ng, the EFCC disclosed that it has arrested and is prosecuting astir 10 Ponzi strategy operators who person allegedly fleeced Nigerians of implicit N12 cardinal betwixt October 2020 and August 2021.

The EFCC Special Fraud Unit (SFU) had arraigned Dominic Joshua of Brisk Capital Limited for allegedly defrauding investors of implicit N2 cardinal with a committedness of a 60 per cent ROI.

Also successful Lagos, the anti-graft bureau precocious arrested a mates for allegedly defrauding unsuspecting victims successful an N935 cardinal Ponzi scheme.

The suspects, Emmanuel and Victoria Jaiyeoba, who were arrested astatine their residence successful Ibadan, Oyo State, are parents to Adewale Daniel, Marketing Director, Wales Kingdom Capital Limited.

Ponzi scheme
Source: Getty Images

Signs that constituent to a Ponzi scheme

There are a batch of Ponzi schemes retired determination looking for victims to scam them of their hard-earned money. So it is lone omniscient to larn however to spot them successful bid to prevention your resources. These are communal traits among them.

1. Promise of High returns with nary risk: When an concern strategy promises much than mean returns fixed by immoderate accepted concern opportunity, past determination is simply a request to beryllium suspicious of it. Ponzi schemes, a batch of times committedness up to a 100% instrumentality connected investments. There’s nary much evident reddish emblem than this.

2. Promise of accordant returns: Normally, markets fluctuate arsenic concern markets emergence and autumn implicit time. When a promises consistently affirmative returns careless of wide marketplace conditions, past you should beryllium skeptical.

4Unli. censed sellers: nzi schemes usually person nary registration past with a country's fiscal regulators. In Nigeria for instance, the Securities and Exchange Commission, the Central Bank of Nigeria and others licence concern houses to run successful the country. Where these approvals and licenses are not available, it is lone imaginable that 1 mightiness beryllium dealing with a Ponzi scheme.

Unlicensed sellers: Legitimate investments are usually sold by licensed operators dissimilar successful the lawsuit of Ponzi schemes which are sold by unlicensed and unapproved operators. Always scope retired to regulators to verify this.

5. Vague oregon Complex concern model: It is advisable you refrain from dealing with concern schemes that uncovering factual and implicit accusation astir the organisation and its representatives is simply a large problem. When the operations and however gross is generated are excessively analyzable to understand, past you should beryllium wary.

6. Unclear paperwork: When the mathematics of the strategy doesn't look to beryllium adding up, past 1 should beryllium concerned. Also, errors successful fiscal statements are besides reddish flags.

7. Difficulty receiving payments: When the organisation begins to miss payments oregon you person trouble making withdrawals, it is astir apt a Ponzi scheme. A batch of times, they connection adjacent higher returns to forestall investors from cashing out.

What the experts are saying astir Ponzi schemes

Speaking connected the thriving of Ponzi schemes successful Nigeria, Dayo Oludare, a fiscal expert said that the main crushed is due to the fact that of the declining economy. He said:

In a state wherever the outgo of surviving is precise high, salaries are thing to constitute location astir and investments are not yielding much, it is casual for radical to get tempted erstwhile idiosyncratic promises them 40%-100% returns, particularly if they cognize idiosyncratic who has already gotten paid.

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Source: Legit.ng