A cryptocurrency trading platform that promised high monthly returns has collapsed, leaving thousands of Kenyan investors facing steep losses and fresh concerns over online financial fraud.
CBEX, a trading app that claimed to use artificial intelligence to generate consistent profits, stopped processing withdrawals last week and reset user account balances to zero. The company said the move was due to a system failure triggered by “malicious market manipulation” — but offered no further evidence to support the claim.
CBEX became popular in Kenya and parts of West Africa in recent months, thanks to aggressive promotion and a referral scheme that rewarded users for bringing in new members. The app was especially appealing for its promise of up to 100% monthly returns — a claim that financial experts now describe as highly unrealistic.
Following the collapse, the platform asked users to pay additional fees, ranging from $100 to $200, to “verify” their accounts and allegedly recover lost funds. This has deepened suspicion among observers and users that the operation was a Ponzi scheme.
How the Scheme Worked
CBEX told users it traded in Tether (USDT), a cryptocurrency pegged to the US dollar. Investors could view a dashboard showing their returns, referral bonuses, and supposed trading volumes.
Withdrawals were only allowed once certain trading thresholds were met. These limits were frequently raised without explanation, making it increasingly difficult for users to access their funds.
The company maintained active Telegram channels, where updates were posted under the name “Harold”, described as a team director. Investigations later revealed “Harold” to be an automated bot.
The final message from the app blamed a “surge in trading pressure” for the sudden losses and asked users to deposit additional funds to begin “account restoration”. Industry professionals said this request closely mirrors known fraud patterns in other crypto-related schemes.
Signs of a Pyramid Scheme
Independent cryptocurrency analysts say CBEX displayed multiple warning signs of a pyramid-style scam.
First, the platform’s returns did not reflect broader market conditions, which typically involve significant volatility. Second, earnings increased by recruiting new users, a core trait of pyramid schemes. Finally, the use of personal identification documents for registration has raised alarms about potential identity theft.
“Consistent, high-yield earnings with zero risk simply don’t exist in crypto trading,” said a Nairobi-based analyst, who requested anonymity. “Platforms that make such claims often exist only to attract deposits and collapse once new investments slow down.”
Data Privacy Risks
Beyond the financial losses, users were required to submit copies of their national identification cards and photographs for “know-your-customer” (KYC) compliance. Experts now warn that such data could be sold or reused in other fraudulent schemes.
There is no indication that CBEX was registered with any local or international financial regulator.
A Growing Pattern
This is not the first time an unregulated online platform has left Kenyan investors empty-handed. A similar scheme, Public Likes, collapsed in 2021 after promising payouts for liking social media ads. That platform also relied on paid account upgrades and referrals, and it shut down shortly after its mobile payment service was suspended.
With rising interest in cryptocurrency across Africa, experts are urging governments to take stronger action against such schemes. There are renewed calls for public education, tighter regulation, and digital oversight to protect vulnerable populations from increasingly sophisticated scams.
What Happens Next?
At the time of publication, CBEX’s website was offline, and its Telegram channels had been locked from public comments. No individuals associated with the app have been identified, and there are no official investigations underway.
Authorities in Kenya have not issued a formal response.
The collapse has left many questioning how such a scheme spread so widely and for so long — and whether the people behind it will ever be held accountable.
