Kenyan Nationals Among Eight Suspects in Massive Cryptocurrency Fraud

The Economic and Financial Crimes Commission (EFCC) of Nigeria has launched an intensive manhunt for individuals implicated in a massive cryptocurrency fraud. 

This follows the collapse of Crypto Bridge Exchange (CBEX), which has left investors across Africa facing significant financial losses. The EFCC's investigation seeks to bring to justice those responsible for the scheme, which has exposed vulnerabilities in the burgeoning cryptocurrency market and underscored the need for stricter regulatory oversight. CBEX, operating under the guise of a legitimate trading platform, lured thousands of investors from Nigeria, Kenya, and Egypt with promises of high returns on digital asset investments. 

The platform claimed to employ artificial intelligence-driven trading strategies and offers referral bonuses, promising returns as high as 30% within a month. However, the platform abruptly ceased operations, leaving users unable to access their funds. Preliminary estimates suggest that investors have lost over $840 million. The EFCC has identified eight individuals as key suspects in the scheme. The suspects include four Kenyan nationals—John Okiroh Otieno, Israel Mbaluka, Joseph Michiro Kabera, and Serah Michiro—who were reportedly residing in Lagos, Nigeria. 

The other suspects are Nigerian citizens: Seyi Oloyede, Emmanuel Uko, Adefowora Oluwanisola, and Adefowora Abiodun Olaonipekun. The commission has issued a public notice urging anyone with information about the suspects' whereabouts to come forward to aid in their apprehension. Investigations have revealed that CBEX was neither registered nor licensed to operate as a digital asset exchange in Nigeria or any other African jurisdiction. The platform's promotional activities, which included exaggerated claims of guaranteed returns, were designed to create a false sense of legitimacy and lure unsuspecting investors. 

Nigeria's Securities and Exchange Commission has described the scheme as a Ponzi operation, where funds from new investors are used to pay earlier participants until the system collapses under its weight. The EFCC has enlisted the support of international agencies, including Interpol and the Federal Bureau of Investigation, to track down the suspects and recover the stolen funds. The collapse of CBEX has also drawn attention to the broader issue of financial literacy and the risks associated with unregulated investment platforms.

Many victims were enticed by the promise of quick and substantial returns, a hallmark of fraudulent schemes. In Kenya, the fallout has been particularly severe, with numerous investors reporting significant losses. Despite this, Kenyan authorities have yet to launch a formal investigation or issue a public statement on the matter. The CBEX scandal is not an isolated incident. In recent months, Kenyan police and international authorities cracked down on similar schemes, including a case involving 24 Kenyans who were arrested for orchestrating an online credit card fraud that siphoned $8.6 million. 

The funds were funnelled through international banking systems to destinations in the United Arab Emirates, Nigeria, and China, highlighting the global reach of such operations. Notably, the rise of cryptocurrency and digital asset trading has opened new avenues for financial innovation, but has also created opportunities for exploitation.