- A Nigerian man shared insights into the workings of Ponzi schemes that keep surfacing and failing in the Nigerian financial space
- The man’s post is coming after Cbex reportedly failed and trapped money invested in it by unsuspecting members of the public
- He said Ponzi schemes often seek to favour the early investors who then put in more money out of greed, only to discover they have been scammed
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A Nigerian man has shared his understanding of how Ponzi schemes operate and how they convince people.
The man, Brian Jonah Dennis, published a piece on Facebook, narrating how Ponzi schemes scam unsuspecting members of the public.
Brian Jonah Dennis explained how money doublers work in Nigeria. Photo credit: Facebook/Brian Jonah Dennis and Getty Images/Joseph Egabor.Source: UGC
Brian said the first thing Ponzi’s organisers do is keep a certain amount, like N10 million, which they use to pay initial investors.
How Ponzi schemes operate
He said a Ponzi scheme is essentially money doubling. Once the first person gets their money doubled, they go to announce it to other potential investors.
He wrote:
“Ponzi is really simple. Keep N10m as your starting budget outside of your website. Promise to give people 100% of their money in 1 month on your website. All you need is 1 gullible person to register. He is gullible but he’s not stupid. So he’ll register with very small money he won’t miss like N10k. In 30 days, his 10k is now N20k. Give him 10k from your 10 million capital. He withdraws it and in his head he is lucky. So what does he do? He is gullible but he’s not stupid as I said so he keeps his first N10k and reinvests the profit he made just to see whether the platform is really paying or he was just lucky.”
Brian explained that the investor would be surprised that his money would still double again after 30 days.
The investor will then invest more money, having been convinced that it is a means for him to double his money.
The man Ponzi schemes are essentially money doublers. Photo credit: Facebook/Brian Dennis Jonah.Source: Facebook
How Ponzi schemes manage to convince investors
The organisers of the Ponzi scheme then came up with additional bait to attract more people. They promise the initial investors referral bonuses so that they will announce it more to people.
He explained:
“30 days later his money has doubled. He cannot believe his eyes. This time he goes higher to 50k and after 30 days you give him N100k. You still have excess liquidity. No fear. Meanwhile he has discovered an infinite money glitch and puts in 200k. This is where you tell him that he stands to make 10% from referrals’ deposit. He goes to facebook to post about a new update that has been paying him. He shows screenshots of his deposits and withdrawals. He shows family members and colleagues. They all start with small funds just to test but you have enough liquidity left to cover their withdrawals without any headache.”
According to Brian, Ponzi operators close their websites and stop responding after they have gathered enough money from so many people.
He said it is deliberately planned in such a way that it will be difficult for greedy people to ignore.
His words:
“After their first month withdrawals, they really confirm that what the first guy told them was true and that the platform is truly reliable. They have doubled their money and solved pressing family and business issues. Why stop there? It’s time to change their car, time to renew their rent, time to pay school fees for the kids. All they have to do is lock money for 30 days and get double of it. The ones that have savings empty it, the ones that don’t have will go borrowing from friends. Word keeps spreading and the deposits are pouring in. As time goes on, your initial N10m has depleted but your wallet has over 500 million from people waiting for their 30 days to complete so they can go and ball. That’s when you turn off the website and move on with your life and newly ill gotten wealth.”
Securities and Exchange Commission warns against Ponzis
Meanwhile, TheTalk.NG reached out to the Nigerian Securities and Exchange Commission (SEC), and it is said it is illegal to operate investment platforms that are not registered.
Efe Ebelo, head of external relations at SEC, told TheTalk.NG in a text:
“The Securities and Exchange Commission (SEC) has again emphasized that any platform not registered with the SEC is illegal and therefore warns Nigerians against patronizing unregistered platforms.”
Quoting Dr. Emomotimi Agama, who is the Director-General of the SEC, Ebelo said the Investment Securities Act 2025 established rules for the operation of such platforms.
The text reads:
“Agama said the Act has established clear rules and regulations for digital asset platforms, including registration requirements to promote transparency and trust. This, he said, allows the SEC to crack down on illicit activities, such as Ponzi schemes, pump and dump tokens, and unregistered exchanges, creating a safer environment for investors.”
Preist reacts to crash of Cbex
Earlier, TheTalk.NG reported that a Nigerian Catholic priest has shared his observation about the alleged crash of Cbex, a digital assets trending platform.
Reverend Father Kelvin Ugwu, a Nigerian priest who is on a mission to the Gambia, said people do not want to be told the truth.
His comments come as people are alleging on social media that Cbex had crashed and that investors’ funds are trapped.
Source: TheTalk.NG
