Is CBEX a Ponzi scheme? – Here is what we think

CBEX.cx was recently labelled as a suspicious investment platform, drawing scepticism on X after several investors took to the microblogging site to vent their frustration after the withdrawal function was suspended today.

It began operations in Nigeria in late 2024, despite claims of existing since 2017, a timeline contradicted by its domain registration and distinct identity from the legitimate China Beijing Equity Exchange (cbex.com.cn).

It was portrayed as an investment platform leveraging artificial intelligence (AI) to trade on behalf of users, offering a 100% ROI in just 30 days. That investments are accepted exclusively in USD, with no minimum or maximum limits disclosed publicly, makes it acceptable to a wide audience.

The platform’s website, designed to resemble reputable exchanges like ByBit, creates an illusion of credibility, though it lacks affiliation with accredited financial institutions.

A key feature of CBEX is its referral-based incentive system. Users earn bonuses for recruiting others, with rewards increasing based on the size of their “upline”, a network of referrals. This multi-level marketing (MLM) structure encourages aggressive recruitment, promising higher payouts for larger networks.

However, the platform imposes strict withdrawal policies. New users face a 40-45 day lock-in period before accessing funds, and early withdrawals incur a 20% penalty. Some users report an additional, undisclosed condition requiring them to get at least 12 referrals before withdrawing profits, a tactic that shifts the focus from investing to recruitment.

Earlier today, users reported a halt in withdrawals, with the platform citing “system upgrades” and promising access by April 15. Such delays, coupled with reports of aggressive customer support demanding additional deposits, have fuelled suspicions of fraud.

Why CBEX could be a Ponzi scheme

Ponzi schemes generally operate by paying returns to earlier investors using funds from new investors, lacking a legitimate revenue source. CBEX exhibits several hallmarks of this model:

1. Unsustainable Returns: A 100% ROI in one month is unrealistic for any legitimate investment, even in high-risk markets. Without evidence of AI-driven trading or other profit-generating activities, CBEX likely relies on new investments to pay promised returns, a classic Ponzi trait.
2. Referral Dependency: The platform’s emphasis on recruitment, with bonuses tied to upline size and withdrawal conditions linked to bringing in 12 investors, mirrors pyramid scheme mechanics. This structure prioritises growth over profitability, which is unsustainable without a constant influx of new funds.
3. Withdrawal Restrictions: The 40-45 day lock-in, 20% early withdrawal penalty, and today’s payment halts suggest CBEX delays payouts to manage liquidity, a common tactic in Ponzi schemes to stall collapse.
4. Regulatory Warnings: On April 23, 2024, Hong Kong’s Securities and Futures Commission (SFC) flagged CBEX Group as a suspicious virtual asset trading platform, citing potential fraud. The Hong Kong Police Force has blocked related websites, reinforcing concerns about its legitimacy.
5. Lack of Transparency: CBEX is unregistered and unregulated, offering no verifiable proof of trading or financial operations. Its mirroring of legitimate platforms and false claims of a 2017 origin further erode trust.

Moreover, user experiences amplify these concerns. Trustpilot reviews describe blocked accounts, demands for additional fees, and losses as high as €88,470 or $400,000. Scamadviser’s low trust score, citing negative feedback and potential malware, adds to the evidence.

These indicators collectively point to CBEX operating as a Ponzi scheme, where early investors may see returns, likely from new funds from their recruits, while later ones face losses.

Is there a chance that CBEX might not be a Ponzi scheme?

Some users argue CBEX is legitimate, citing successful early withdrawals. Trustpilot’s mixed reviews include six 5-star ratings, with users reporting hassle-free payouts and even praising the platform’s charitable contributions.

These accounts suggest CBEX may have fulfilled promises for some, particularly early adopters, creating a perception of reliability.

However, this aligns with Ponzi scheme dynamics, where initial payouts build trust to attract more investors. Sceptics note that positive reviews may be fabricated or reflect early-stage payouts, not sustainable operations, given the overwhelming negative feedback and regulatory warnings.

Also, CBEX’s model echoes notorious Nigerian Ponzi schemes, notably MMM (Mavrodi Mondial Moneybox, 2015-2016) and GetHelp (2017).

MMM promised 30% monthly returns, relying on peer-to-peer “donations” rather than investments, with no underlying business. It collapsed in 2016, leaving millions in losses after withdrawal freezes.

Similarly, GetHelp incentivised recruitment with high returns, only to shut down in 2017 amid fraud allegations and inaccessible funds. Both schemes thrived on referral systems, promising wealth through community growth, like CBEX’s upline bonuses and recruitment conditions.

Like CBEX, MMM and GetHelp exploited trust in Nigeria’s economic climate, where high unemployment and limited financial literacy made quick returns appealing. All three delayed withdrawals with excuses; MMM cited “system glitches”, GetHelp blamed “overwhelmed servers”, and CBEX pointed to “upgrades”. 

These parallels suggest CBEX follows a familiar playbook, targeting vulnerable populations with unsustainable promises.