The Securities and Exchange Commission (SEC) has sounded a fresh alarm over the growing menace of Ponzi schemes in Nigeria, disclosing that citizens have collectively lost about N316bn to fraudulent investment platforms over the years.
The revelation came from the Head of the SEC’s FinTech and Innovation Department, AbdulRasheed Dan-Abu, during the Commission’s journalists’ academy held in Abuja.
Dan-Abu described Ponzi schemes as fraudulent investment operations that pay returns to earlier investors using funds from new entrants, rather than from any legitimate business activity.
How Ponzi Schemes in Nigeria Continue to Trap Victims
According to the SEC official, the desire for quick riches remains the major reason Nigerians fall for such scams.
“Everybody just wants to get rich today. That is what makes people fall into this trap,” he said.
“Even the educated are not immune because greed often clouds judgment.”
Dan-Abu recalled how the infamous MMM Nigeria scheme defrauded thousands of investors with promises of 30 percent monthly returns.
Despite its collapse, he noted that many victims were deceived into paying again when operators falsely claimed that a new payment would restore their lost funds.
He further cited examples of deceptive operations such as New Nation Women in Oil, which masqueraded as a government-endorsed women empowerment scheme and reportedly duped about 155,000 rural women who sold their belongings to participate.
“These operators disguise their activities as legitimate investments, often using emotional appeal, fake endorsements, and glossy marketing to lure victims,” he added.
The Shocking Cost of Ponzi Schemes in Nigeria
A breakdown of SEC’s presentation showed that the cumulative losses from Ponzi schemes in Nigeria run into hundreds of billions of naira.
Investors lost N100m each in Cow Lane and Durrell Nigeria Ltd.
Now-Now Alert defrauded victims of N235m.
G-Circle Investment and Box Value Trading each wiped out about N400m.
Yuan Dong carted away N900m, while Famzi Intbiz cost investors N2.5bn.
Bara Finance led to N3.5bn in losses, Galaxy Construction and Transportation took N7bn, and MMM Nigeria erased N18bn.
The single largest scam still under SEC investigation exceeds N174bn in investor losses.
In total, Nigerians lost an estimated N315bn–N316bn to these fraudulent schemes, making it one of the most devastating financial crimes in the country’s history.
Social Media: A Growing Breeding Ground for Ponzi Scams
Dan-Abu warned that the rise of social media platforms has created fertile ground for new waves of Ponzi schemes in Nigeria.
Many scammers now operate through WhatsApp groups, Telegram channels, and Facebook pages, luring unsuspecting investors with flashy testimonials and unrealistic promises.
“They promise huge returns with little or no risk. But there’s no legitimate business in the world that guarantees high profits overnight,” he said.
“Once new entrants stop joining, the scheme collapses and the operators vanish.”
He urged Nigerians to always verify any investment with the SEC before committing funds, stressing that any unregistered entity is automatically illegal.
SEC Calls for Public Vigilance and Media Collaboration
The SEC official appealed to journalists to join the fight against Ponzi scams by creating consistent awareness.
“If the media write about this once a week, you could save thousands of people from financial ruin,” he said.
“Tomorrow, it could be your friend, your cousin, or your neighbour.”
He emphasized that vigilance and collaboration remain the most effective tools against Ponzi schemes in Nigeria.
SEC Moves to Strengthen Oversight on Digital Assets
Speaking further, the SEC Director-General, Dr. Emomotimi Agama, stressed that while Nigeria cannot afford to lag in regulating digital finance, investor protection must remain the top priority.
Represented by the Commission’s Head of External Relations, Efe Ebelo, Agama noted that digital assets had become a “structural pillar of modern finance” and thus require transparent oversight.
“Regulation is not about restriction; it’s about building trust. Innovation must serve progress, not predation,” Agama stated.
He revealed that Nigeria ranks among the world’s top adopters of digital assets, with over one-third of its population engaged in crypto-related activities.
However, this rapid adoption has also exposed many to scams, fake wallet applications, and phishing attacks — trends similar to Ponzi schemes in Nigeria.
To curb the menace, Agama said the SEC is collaborating with the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) to freeze illicit wallets and recover stolen funds.
Blockchain analytics tools are also being deployed to trace suspicious transactions and track fraudulent operators.
“If regulators clamp down too hard, innovation migrates offshore. If we regulate too softly, risks multiply. The key is balance,” he explained.
Agama concluded by reaffirming that the future of finance is digital but must remain ethical, transparent, and accountable.
“In this new frontier of finance, trust is the ultimate currency, and our highest duty as regulators is to preserve it,” he added.
The SEC’s latest warning underscores an urgent national concern — the persistence of Ponzi schemes in Nigeria.
Despite widespread awareness, greed, ignorance, and digital manipulation continue to drive losses in billions, threatening financial stability and public trust.
Experts urge Nigerians to verify every investment with the SEC and remember that “if it sounds too good to be true, it probably is.”
