Thousands of digital currency enthusiasts are
grappling with unexpected losses after CBEX, a cryptocurrency and forex trading
platform, wiped out investor accounts overnight, leading to fears of another
elaborate scam in Africa’s unregulated crypto space.
Touted as an AI-driven trading platform, CBEX
had captured the attention of crypto users in Kenya and parts of West Africa,
promoting a lucrative deal of 30% monthly returns, referral commissions, and
effortless withdrawals. However, these promises have now evaporated, leaving a
trail of financial devastation.
CBEX Shuts
Down: Dreams Turn to Dust
Victims reported waking up to find their digital
wallets emptied, with balances mysteriously reduced to zero. The platform,
which operated without formal licensing in Kenya, relied on Telegram and
WhatsApp channels for user communication. Its website lacked physical contact
details, while company ownership remained shrouded in secrecy.
In a bid to explain the chaos, CBEX claimed it
was the target of a "malicious hacking operation". Messages shared in
its private Telegram groups blamed unnamed fraudsters for manipulating the
app’s AI-based trading mechanisms through high-risk margin operations. However,
cybersecurity experts and blockchain analysts have cast doubt on the claim.
What has fueled more suspicion is the
platform's new demand for "account verification fees" before
compensating affected users. Depending on previous balances, users are being
asked to pay between KSh 12,961 and KSh 25,922—a move analysts believe is part
of a well-orchestrated exit scam.
“A Ponzi
Scheme in Tech Clothing” — Experts Warn
“This fits the mold of a typical Ponzi scheme
disguised with tech buzzwords,” said Newton Mwaura, a Kenyan blockchain
consultant. He points out that exaggerated returns, combined with AI and
aggressive referral systems, should have been immediate red flags.
CBEX now joins a growing list of crypto
collapses across Africa, including Dunamis coin in Uganda and Mirror Trading
International (MTI) in South Africa, both of which left thousands in financial
ruin.
Kenya’s
Crypto Boom and Regulatory Vacuum
Kenya’s fast-growing appetite for
cryptocurrencies has made it particularly vulnerable to digital fraud. A 2022
UNCTAD study estimated that nearly 1 in 10 Kenyans owned digital assets, with
many lured by quick-profit schemes due to limited financial literacy and
oversight.
While the Central Bank of Kenya (CBK) issued a
warning as early as 2015 against using virtual currencies, its stance has since
shifted. With the rise in digital currency adoption, the government is moving
toward regulation. In December 2024, the National Treasury introduced a Draft
Policy on Virtual Assets, alongside the proposed Virtual Asset Service
Providers Bill, aiming to finally bring clarity and control to the crypto
sector.
As for CBEX, both the CBK and Capital Markets
Authority (CMA) have yet to formally comment, though sources suggest
preliminary investigations are underway.
Caution in
the Crypto Frontier
The CBEX debacle serves as a harsh reminder of
the risks tied to unregulated digital investments, especially those that
promise guaranteed returns. As Kenya pushes toward a formal crypto regulatory
framework, experts advise investors to remain vigilant, conduct due diligence,
and avoid platforms that lack transparency and accountability.
Until strong legal structures are in place, crypto
traders in Kenya remain exposed, navigating a high-risk environment fueled by
innovation, but plagued by exploitation.
