SEC Cautions Against Unregistered Crypto Bridge Exchange

The Securities and Exchange Commission (SEC) has stated that Crypto Bridge Exchange, also known as CBEX, has not received any registration from the Commission to operate as a Digital Assets Exchange.

In a circular dated April 17, 2025, the Commission addressed recent media reports regarding the activities of CBEX. The SEC stated, “CBEX, which also operates under the corporate identities of ST Technologies International Limited and Smart Treasure/Super Technology, has misrepresented itself as a digital asset trading platform, promising high returns to investors in Nigeria.”

The SEC clarified that neither CBEX nor its affiliates have ever been granted registration to operate as a Digital Assets Exchange, solicit investments from the public, or perform any other functions within the Nigerian capital market.

“Preliminary investigations by the Commission have indicated that CBEX has engaged in promotional activities designed to create a false perception of legitimacy, enticing unsuspecting individuals to invest money with the promise of unusually high guaranteed returns within a short timeframe,” the Commission reported.

Furthermore, the SEC highlighted that CBEX has failed to honour withdrawal requests from its subscribers and has abruptly closed its physical offices amid growing complaints.

The SEC emphasized that under Section 196 of the Investments and Securities Act of 2025, the Commission will collaborate with relevant law enforcement agencies to take appropriate action against CBEX, its affiliates, and promoters.

The Commission urged the public to refrain from investing in or dealing with any entity offering unrealistic returns or utilizing similar recruitment-based investment models, saying that prospective investors are advised to verify the registration status of investment platforms through the Commission’s dedicated portal.

The director-general of SEC, Dr Emomotimi Agama, recently stated that the Commission is launching a more vigorous and coordinated enforcement strategy against unregistered and illegal investment schemes, commonly known as Ponzi schemes.

Agama noted that with the newly enacted Investments and Securities Act of 2025, the Commission now possesses enhanced powers to prosecute Ponzi schemes and their promoters.

He added that investigations into CBEX are ongoing and assured the public that the promoters of the failed scheme will not escape justice, as the new law has empowered the Commission and closed loopholes in emerging areas of virtual and digital assets.

“The Investments and Securities Act of 2025 has provided the Commission with the legal authority to clarify regulations, ensure investor protection, and enhance market confidence, particularly in new and previously unregulated sectors such as digital asset exchanges and online foreign exchange platforms,” Agama explained.

He emphasised that while the apex capital market regulator will continue to support innovations in finance and investments, it will also enforce strict oversight in line with its mandate for enhanced investor protection.

He recalled that even with the limited scope of the previous Act, the SEC had effectively monitored the market and shut down several Ponzi schemes, with some promoters, like those from Fahmzi Interbiz, facing imprisonment for defrauding Nigerians.