Ponzi schemes keep leading people to financial ruin.
In April 2025, CryptoBridge Exchange, a fraudulent investment scheme known as CBEX, was believed to have bankrupted its believers and subscribers by 1.3 trillion naira.
Most people who did not join this scheme believed its participants were gullible and not street smart.
It reminded me of the previous Ponzi schemes I have been involved in, both the successful and the failed ones.
There are lessons to learn here. Please read to the end.
My First and Successful Experiences with Ponzi Schemes
In 2016, I invested money in MMM Nigeria.
I was still an undergraduate then. MMM Nigeria promised each investor a monthly return of 30% on their money. Their model was simple. You became a member of their forum by investing as little as 15,000 Naira. That money gets paid directly to another member. At the end of your 30-day cycle, you get paid by other members who recently registered.
On 13 December of that same year, the scheme was frozen. Accounts blocked. And the founders disappeared without a trace.
This was my first experience with a Ponzi Scheme. But it was not my last. Other schemes (like Twinkas, Givers Forum and a few others) replicated this business model:
Invest and tell other people to invest on their platform. Get your returns on the same platform. Then the platform ‘crashes’ a few months later.
It was not one of my proudest moments participating in those Schemes. It was a ‘Rob Peter to Pay Peter’ type of investment. But the profits paid my bills and food while in the university.

The Ponzi Clock
What are Ponzi Schemes, and how do they work?
Imagine you have a Shop that sells Plantain chips.
People give you money to buy plantain to make more chips, so you can eventually give them back more money than they gave you.
That’s how a real business works!
Now, imagine a fake plantain chips shop run by a tricky person. This person tells people, “If you give me some money, I promise to give you back even MORE money very soon!”
But here’s the secret: this tricky person doesn’t sell any plantain chips or do any real work to make more money.
Instead, when the first people want their extra money back, the tricky person uses the money that NEW people give them to pay the first people.
It looks like everyone is making money, right?
The first people are happy because they got more money back, and they tell their friends to join in! So, more and more people give their money to the tricky person.
This is called a Ponzi Scheme.
It’s a big money game where the early players get paid with money from the later players.
A Ponzi scheme is a tricky scam where someone promises to give people a lot of money if they invest with them. But instead of really earning money, the scammer just uses new investors’ money to pay the old investors.
But here’s the problem: eventually, the tricky person runs out of new people to give money.
When that happens, there’s no more money to pay anyone, and the whole thing falls apart.
The tricky person often disappears with all the money, and most people lose everything they put in.
So, a Ponzi scheme is a fake way to make money that relies on tricking new people into giving money to pay off the old people. It’s not a real business, and it always ends with most people losing their money.
My Last Experience with Ponzi Schemes
In 2020, A friend introduced me to a Customs officer who was into “forex trading”.
The customs officer offered a 100% return in 90 Days with monthly payouts. I cannot remember the full details, but my friend was in his third month of investment and was about to withdraw his principal and reinvest only the profit earned.
My plan was simple.
I did not ask questions. I did not ask which trading strategies this customs officer/forex trader employed. All I wanted to do to earn a profit, recover my principal and keep “cashing out”
Long story short, I lost one-third of my money because the business stopped paying me in the third month.
I eventually discovered that the forex trading business was simply money invested in MBA Forex. This was a Ponzi Scheme that crashed in 2020, just like MMM in 2016. Same Script, different actors.
This was my last experience losing money to any Ponzi scheme, and I will tell you why.
The Risk is not in the investment. The Risk is in the investor
Two people invest in the same thing. This could be a stock, a business, crypto or even a Ponzi scheme.
One person learns first, stays calm, and invests wisely. The other just guesses, follows the crowd, and panics when things go down. The investment didn’t change — the people did.
Here is a breakdown of what happens.
Person number 1 does their homework. They learn about the company, understand what it does, and don’t put all their savings into just that one company. They’re careful and think long-term.
Person number 2 hears from a friend that this company is offering a profitable investment. They don’t know anything about the company, but they put all their money into it, hoping to get rich quickly. When the investment goes bust, this money is gone for good.
This was never about Ponzi Schemes.

The Risk is in the Investor
Now, look at these other examples and their key lessons:
Example 1: The “Money Doubling” WhatsApp Group
Someone adds you to a group chat that promises to double your money in 48 hours. You see payment screenshots flying everywhere.
People are hyped. You send ₦50k, hoping to get ₦100k back.
In this scenario, Scammers create FOMO (Fear of Missing Out) to cloud your judgment. If it’s real, it will still be real tomorrow.
Key lesson: Never invest money based on urgency or pressure.
Example 2: The Pastor’s Investment Club
A trusted church leader promotes a “divinely inspired” investment opportunity. Because he’s respected, no one questions it.
People sell land, borrow money, and throw in their savings.
In this scenario, respect does not equal financial expertise. Always verify, not just believe.
Key lesson: Separate trust in people from trust in their financial recommendations.
Example 3: The Crypto Pump Group
You join a Telegram group where admins tell everyone to buy a certain coin. The price shoots up. You join in.
3 days later, the coin crashes. Admins vanish.
Key lesson: run away if you’re getting investment advice in emojis and hype language.
Stop ignoring the red flags of Ponzi schemes because you want ‘free money’

The Red Flags of Ponzi Schemes
Risk comes from not knowing what you are doing – Warren Buffett.
The real risk isn’t the thing you put your money in. It’s how smart, prepared, and patient you are with it. A smart investor can do well even with a normal investment, while a risky investor can lose money even with something that seems safe.
The return of money is more important than the return on money.
When it comes to money, getting your original money back safely is the most important thing.
If you focus only on trying to make a lot of extra money (the return on money) very quickly, you will take bigger risks. These risks could lead to you losing all your original money (the return of money).
Think of it like this:
Getting your money back (return of money) is like making sure your house is safe and sound. Making extra money (return on money) is like adding cool decorations to your house.
Decorations are nice, but having a safe house to live in is way more important!
So, while making extra money is good, the first and most important thing when you invest or lend money is to make sure you’re going to get your original money back.
If you don’t get your original money back, then any potential extra money doesn’t even matter!

Smart Investing
How to Avoid Financial Ruin with Ponzi Schemes (Or any Investment Opportunity)
After my lessons in 2016 and 2020, there are six questions I now ask before investing.
Before putting money into any opportunity, I now run through this checklist:
- Transparency Test: Can I easily understand how exactly this investment makes money?
- Expertise Verification: Do the people running this have verifiable credentials and experience?
- Regulation Check: Is this investment registered with and overseen by appropriate financial authorities?
- History Analysis: What is the track record of this investment or company beyond testimonials?
- Independent Verification: Can I find information about this opportunity from sources not connected to the people selling it?
- Withdrawal Clarity: How exactly can I get my money out, and are there any restrictions?
If I can’t get clear, satisfactory answers to ALL these questions, I don’t invest.
It’s as simple as that.
These principles extend far beyond just avoiding Ponzi schemes. The same critical thinking protects me from “Get rich quick” business opportunities, dubious crypto projects and even everyday purchasing decisions.

The Too Good to Be True Test
The discipline of questioning what seems too good to be true has become a valuable life skill, not just a financial one.
This is very important.
What if you’re currently in what might be a Ponzi scheme?
Don’t panic, but act quickly.
Stop adding any new money immediately. Try to withdraw your principal investment as soon as possible. Document everything too, from communications, promises, to payment histories.
Don’t let loyalty or hope delay your exit. Also, be prepared for the possibility that you may not recover everything.
What if you’re considering a new investment?
Apply the Questions Checklist above rigorously.
Then set a maximum amount you’re willing to risk. Ideally, this should be no more than 5% of your investment capital. Establish clear exit criteria before you enter and verify through multiple independent sources.
In the world of investment, boring is often beautiful. Consistent, modest returns from legitimate activities will build wealth far more reliably than chasing spectacular promises.
“Don’t be the fool who ‘cashes out’ others. Be the one who walks away with your dignity and your money.”
The most successful investors don’t need excitement – they need results.
I hope this helps.
Godspeed and Cheers.