CBEX scam defrauds African investors

Embarrassed and in debt, Edwin was left reeling after losing $16,000 to CryptoBridge Exchange (CBEX), one of the crypto-trading platforms preying on investors in Africa.

- PERIS GACHAHI OLUSEYI AWOJULUGBE

Mr Edwin, a Kenyan government worker who only gave his first name out of shame, first encountered CBEX on Telegram, a messaging app.

He was lured with promises of guaranteed monthly returns made possible by AI-powered trading systems, with lucrative referral bonuses — classic hallmarks of Ponzi schemes.

"I had very big plans. But I was conned both by the platform and an agent who lied he could help recover my money," Mr Edwin told AFP.

When he began investing last August, there were initial returns, leading him to invest more despite lacking prior cryptocurrency trading experience.

In total, he believes he lost roughly 2.1 million shillings ($16,000), mostly from a bank loan he is now worried about needing to repay.

Blockchain analysis firm Chainalysis says some $9.9 billion was lost to crypto scams globally last year.

'I'M BROKE'

Such scams are not new in Africa, but their scale and sophistication has grown as cryptocurrency spreads.

CBEX collapsed in April, leaving scores of investors like Mr Edwin ruined, mainly in Kenya and Nigeria, according to media reports.

But AFP has confirmed from accessing messages on CBEX’s private Telegram groups that it has since rebooted its operations despite ongoing investigations and warnings by authorities.

Mr Abby, another Kenyan investor, carries the guilt of introducing 25 family and friends to CBEX.

"[They] invested so much, and it all disappeared," he admitted. "I would really love to help them recover but I'm broke."