NAIROBI, KENYA — Thousands of Kenyan investors are facing mounting frustration as hopes for refunds from the collapsed cryptocurrency trading platform, CBEX, continue to fade. The platform, which promised returns of up to 30% in just 30 days, ceased operations in April 2025, leaving users unable to access their funds.
Initial reports indicate that hackers exploited vulnerabilities in the platform’s security systems, siphoning off millions of shillings’ worth of cryptocurrencies belonging to individual traders and investment groups across Kenya and West Africa.
Despite public outcry and a formal investigation launched by the Directorate of Criminal Investigations (DCI) Cybercrime Unit, progress has been slow. Several victims have accused the platform’s operators of poor communication and alleged attempts to downplay the severity of the breach.
“We have been left in the dark,” said Brian Mwangi, a Nairobi-based trader who lost KSh 1.2 million in Bitcoin holdings. “They keep promising updates, but weeks have gone by with no tangible action. It’s as if they are hoping we forget.”
CBEX, also known as CryptoBank Exchange, attracted investors by advertising AI-powered trading strategies and lucrative referral bonuses. However, the platform was not registered with Kenya’s Capital Markets Authority, raising concerns about its legitimacy. The scheme’s collapse has affected not only Kenyan investors but also thousands in Nigeria, with total losses estimated at over ₦1.3 trillion (approximately $847 million) .
In the wake of the collapse, CBEX disabled withdrawals and shut down its communication channels, including its Telegram groups. Investors were then prompted to pay “verification fees” ranging from $100 to $200 to supposedly recover their funds—a tactic experts identify as a common feature in fraudulent schemes .
The Economic and Financial Crimes Commission (EFCC) of Nigeria has launched an investigation into CBEX, collaborating with international agencies such as Interpol to track down the perpetrators.
The Communications Authority of Kenya (CAK) and the Capital Markets Authority (CMA) have issued warnings urging the public to exercise caution when trading on online platforms not officially registered or licensed. They emphasized that most cryptocurrency platforms operating in Kenya are unregulated, leaving investors with limited legal recourse when things go wrong.
“Cryptocurrency investments are highly speculative and come with significant risk,” the CAK said in a statement. “Consumers must be vigilant and only engage with platforms that demonstrate robust security and compliance measures.”
The CBEX debacle underscores the risks associated with unregulated cryptocurrency investments and highlights the need for increased investor education and robust regulatory frameworks to protect citizens from similar scams in the future.
Legal limbo for investors
Legal experts say the situation is complicated by the lack of clear regulatory frameworks surrounding digital assets in Kenya. Without formal licensing and oversight, investors have little protection under existing financial or consumer protection laws.
“The unfortunate reality is that many victims may never recover their funds,” said Patrick Omondi, a lawyer specializing in fintech law. “Until Kenya establishes comprehensive crypto regulations, investors will remain largely exposed to such vulnerabilities.”
Several class-action lawsuits are reportedly being considered by affected users, but lawyers caution that even successful litigation could be fruitless if the platform’s assets are unrecoverable or if its operators have limited resources.
A blow to crypto adoption
The hack has dealt a heavy blow to confidence in Kenya’s fast-growing crypto space. Recent surveys had ranked Kenya among the leading African nations in cryptocurrency adoption, fueled by a tech-savvy population and a search for alternative investment opportunities amidst economic challenges.
“This setback could slow down what has been an exciting digital finance revolution,” said Mercy Achieng, a fintech analyst based in Nairobi. “People are wary now. Trust is fragile, and rebuilding it will take time.”
As investigations continue, authorities are urging Kenyans who believe they were affected by the breach to come forward and file formal complaints. However, with the trail growing cold and no concrete recovery plan in sight, many fear their investments are gone for good.
For now, the dreams of financial independence through crypto trading for many Kenyans seem to have suffered a devastating — and possibly irreversible — blow.
Here are some of the most notable crypto-related schemes and trading platforms that have either collapsed or been flagged as scams:
1. Bitstream Circle (2022)
One of the most notable cases in Kenya involved Bitstream Circle, a crypto trading platform that vanished with investor funds in early 2022.
The platform lured thousands with promises of daily returns of up to 10% through AI-generated crypto trades.
When the site abruptly went offline, it left behind millions of shillings in losses and no trace of its founders.
2. Velox 10 Global (2018)
In 2018, Velox 10 Global, a Brazilian-based crypto investment platform, collapsed after convincing Kenyan investors to pour in money through a multilevel marketing model.
Investors were promised lucrative returns, but the company shut down operations after collecting an estimated KSh 1 billion from East Africans, including high-profile individuals.
3. Decentralized Finance (DeFi) scams
More recently, decentralized finance platforms like Forsage — which operated on the Ethereum and Tron blockchains — drew attention in Kenya.
Marketed as peer-to-peer systems, these platforms turned out to be pyramid schemes. In 2020, the Philippine SEC declared Forsage illegal, and several African users reported losses soon after.
4. Global Crypto Investments (GCI)
In Uganda, Global Crypto Investments (GCI) collapsed in 2021 after collecting over UGX 10 billion from unsuspecting traders.
Promising weekly returns of up to 40%, the company folded suddenly, and the founders went into hiding, leaving victims across Kampala, Jinja, and Mbarara.
5. Mirror Trading International (MTI) – South Africa
In 2020, MTI became one of the largest Bitcoin-related scams in the world. Based in South Africa, it claimed to use a sophisticated trading bot to generate returns.
It drew in over 260,000 global investors, including thousands from Kenya and Nigeria.
When the scheme collapsed, losses were estimated at more than $589 million. Its CEO, Johann Steynberg, fled the country but was later arrested in Brazil.
6. Dunamiscoin – Uganda
In 2019, Dunamiscoin collapsed after convincing thousands of Ugandans to invest in a scheme promising high returns and job opportunities.
With a strong presence in Masaka and Kampala, the company abruptly shut down operations, prompting arrests and widespread investigations. Many victims never recovered their savings.
7. BitClub Network – Global
Touted as a Bitcoin mining pool, BitClub Network promised investors profits from shared mining rewards. It operated in several African countries and across the globe.
In 2019, U.S. authorities dismantled the operation, arresting its key founders. The scheme was revealed to have swindled more than $722 million from investors.
8. Pinkoin (InksNation) – Nigeria
Claiming to use blockchain to eradicate poverty, InksNation launched its own token called Pinkoin, which promised universal basic income for Nigerians.
The platform attracted widespread attention but was declared illegal by Nigeria’s Securities and Exchange Commission in 2020.
Its founder went into hiding, and thousands of users were left with worthless digital tokens.
9. OneCoin – Global
Marketed as a revolutionary cryptocurrency, OneCoin turned out to be one of the largest crypto scams in history, stealing more than $4 billion worldwide.
The scheme reached East Africa, including Kenya, where locals invested heavily.
The platform collapsed after the mysterious disappearance of its founder, Dr. Ruja Ignatova, dubbed the “Crypto Queen,” in 2017.
10. AWS Mining – Brazil-based
AWS Mining operated across several African countries, including Kenya and South Africa. It offered investment plans supposedly linked to cryptocurrency mining.
In 2018, the platform collapsed, and many global regulators, including those in Brazil and the U.S., issued fraud warnings. African users were left without recourse.
11. PCEX – India-based exchange with regional impact (2023–2025)
Though not officially declared a scam, PCEX, a crypto trading platform based in India, began attracting scrutiny in 2023 after users across Kenya, Nigeria, and other parts of Africa raised alarm over withdrawal restrictions, delayed transactions, and poor platform support.
The platform had promoted itself as a fully licensed exchange with white-label offerings and regional partners, luring crypto entrepreneurs to build exchanges under its banner.
However, by late 2023, reports of users being unable to access funds or receive responses from the support team began circulating widely on crypto forums, Telegram and WhatsApp groups.
While no formal charges or shutdowns have been confirmed, PCEX is now widely viewed with suspicion, particularly among African traders who fear they may have fallen into yet another unregulated and potentially exploitative crypto venture.
These incidents have left many wary but have also exposed regulatory gaps across the continent. While cryptocurrencies remain largely unregulated in Kenya and much of Africa, authorities are increasingly being pushed to strengthen consumer protections and clamp down on fraudulent platforms.
