In a previous article, we warned readers about the potential dangers of CBEX trading, hoping that the platform would prove us wrong, but unfortunately, it did not. On April 15th, what many industry insiders predicted finally happened—the CBEX scam finally unfolded. The platform imploded spectacularly, taking with it the life savings of thousands of investors across Kenya and beyond.
But here’s the uncomfortable truth we need to face: while CBEX orchestrated this tragedy, we—the crypto community—enabled it through our collective blindness. The toxic cocktail of FOMO (Fear Of Missing Out), greed, and a desperate desire for financial freedom created the perfect breeding ground for this scheme to flourish.
In a market where crypto assets have recently hit new all-time highs and mainstream adoption is growing, scammers have found fertile ground to plant their deceptive seeds. This article isn’t just about CBEX Kenya—it’s about the ecosystem of scams that continue to evolve and adapt to prey on newcomers and even seasoned investors who let their guard down.
Let’s break down what happened, why it matters, and how you can protect yourself in this wild, often unforgiving crypto frontier.
What Was CBEX Exchange?
If you’re just hearing about CBEX Kenya trading now from the explosion of rage and despair across social media, count yourself fortunate—you’ve dodged a financial bullet that has wounded millions.
CBEX positioned itself as a “revolutionary” crypto exchange promising returns that defied market logic: 2% daily—that’s over 730% annually, if you’re counting. The platform claimed to generate these returns through sophisticated algorithmic trading and market arbitrage. Sound familiar? It should—it’s the same line peddled by virtually every crypto Ponzi scheme since Mt. Gox.
What made CBEX Kenya particularly dangerous was its localized approach. They built deep community networks in Kenya, Nigeria and across the globe, establishing “influencers” in major cities where charismatic recruiters would hold seminars teaching newcomers how to “invest” on the platform. These weren’t just online scammers—they were people in your community, building trust face-to-face.
The CBEX Collapse
The warning signs were flashing in neon from day one, but when you’re promised financial freedom, it’s tempting to look the other way. Here’s what should have sent investors running:
- Ghost Leadership: Unlike legitimate exchanges like Binance (headed by CZ) or Coinbase (led by Brian Armstrong), CBEX operated under mysterious “founders” who never showed their faces. The few public representatives were merely paid actors or low-level recruiters with no actual decision-making power. When leadership hides, your money should hide too.
- Regulatory No-Man’s Land: While reputable exchanges like Binance and Coinbase battle through regulatory hurdles to gain legitimacy, CBEX operated entirely outside regulatory frameworks. No licenses, no compliance officers, no KYC implementation—just a slick website and empty promises.
- The Ponzi Mechanics: CBEX displayed the classic hallmarks of a Ponzi scheme that would make Charles Ponzi himself proud. Early investors were paid using new investors’ deposits, creating an illusion of legitimacy and profitability. They even incentivized existing users to bring in fresh blood with generous referral bonuses—up to 15% of recruited funds. When the new money inevitably slowed down, the whole house of cards collapsed.
- The “Too Good to Be True” Returns: In a market where legitimate staking might yield 5-10% annually, CBEX promised 2% daily and 30% monthly. For context, Warren Buffett, one of history’s greatest investors, has averaged about 20% annually over his career. Anyone promising ten times that return isn’t offering investment—they’re selling fantasy.
Real Stories from the CBEX Scam Fallout
The statistics are staggering, but the individual stories are heartbreaking. After combing through hundreds of testimonials across Twitter, Facebook, and local forums, patterns emerge:
“I am not okay. Whoever introduced us said that people were making up to KSh 30 million a month- the higher the investment, the higher the returns.”I know of someone who took a loan of KSh 4 million and lost it all.”
How CBEX responded
As the CBEX scam began crumbling, they posted a now-infamous message that started with the phrase “Don’t Panic”—ironically, the very words you should panic over when coming from a collapsing scam. What followed was a manipulative attempt to extract even more money from their victims. Users who couldn’t log in or see their wallet balances were told to perform a “manual deposit verification” to qualify for compensation.
The instructions were outrageous: deposit $100 if your account had less than $1,000, or $200 if it held more. And here’s the kicker—failure to comply by April 17th meant you’d be permanently banned and labeled a fraud. They even threatened users who spoke out, warning that anyone who “spread negative sentiments” would lose their right to compensation. This wasn’t a recovery plan—it was a desperate cash grab disguised as customer care. A final, ruthless tactic to squeeze what little funds they could from desperate users before the inevitable blackout.
https://x.com/cbex_official/status/1912015375392190932
How To Trade Crypto Safely and Securely
Alright, let’s talk about how to trade crypto without getting burned. It’s an exciting space, but it’s also wild, and without the right knowledge, you can lose more than just your investment.Let’s turn this tragedy into a teaching moment. Here’s how to navigate the crypto world without becoming the next cautionary tale:
- Educate Before You Allocate: Before putting a single dollar into crypto, spend at least 20 hours learning the basics. Start with reputable resources like Brains With Concepts, Binance Academy, Coinbase Learn, or MIT’s free online blockchain courses. Understand the difference between legitimate investment strategies and get-rich-quick schemes.
- The Platform Vetting Checklist: Before using any crypto platform, run through this essential checklist:
- Who runs it? (Real identities, public profiles, verifiable track records)
- Where is it registered? (Legitimate business registration, regulatory compliance)
- What licenses does it hold? (Financial services licenses, audits)
- How transparent are its operations? (Public proof of reserves, open-source code)
- What’s the community saying? (Not just testimonials on their website, but independent reviews)
- The Social Media Intelligence Network: Create a curated list of trustworthy crypto analysts and security experts. On Twitter, follow accounts like @zachxbt and @PeckShieldAlert who regularly expose scams. Join reputable Discord and Telegram groups like Trenchradar focused on crypto security. Information is your first line of defense.
- The Psychology of Scam Resistance: Understand the emotional buttons scammers push:
- Urgency (“Limited time offer!”)
- Exclusivity (“Only for selected members!”)
- Fear (“You’ll miss the biggest opportunity of your life!”)
- Social proof (“Look how many people are making money!”)
Greed is a powerful thing in the crypto world, and so is FOMO (Fear of Missing Out). Don’t let it drive your decisions. Many people got into CBEX trading because they saw other people “making bank,” and they didn’t want to miss out. Spoiler alert: they missed out on their money instead. Stay patient, make informed decisions, and always remember—there’s no such thing as a “get rich quick” scheme.
The PCEX Threat: Meet the New Scam, Same as the Old Scam
As I have said before, scams have existed in the past and continue to exist in the present. Just like the CBEX scam, there is PCEX, a very similar fishy website, that I’m afraid follows in the same footsteps. Here is my quick overview of PCEX
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Copycat Website: PCEX looks almost identical to CBEX. I’m not saying that’s a deal-breaker, but let’s just say “birds of a feather flock together.”
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Trustfinance Score of 0: Trustfinance, a platform that evaluates crypto sites, has given PCEX a score of 0 out of 100. That’s a strong “stay away” signal.
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Mystery Ownership: Like CBEX, PCEX has no clear leadership or ownership. If they can’t even tell you who’s running the show, don’t be the one funding their mystery pot.
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No Regulation: Yet again, we’re looking at a platform that operates outside of any reputable financial regulations. That’s a huge red flag.
Be cautious with platforms like PCEX. Do your research, but don’t let it fool you into thinking you’re getting into something “legit.”
This isn’t coincidence—it’s calculation. Scammers know that despite losses, many victims remain psychologically primed to try again, desperately seeking to recoup their losses through similar schemes.
How to Invest in Crypto Safely
The crypto space isn’t all doom and gloom. There are ways to earn passive income, even if the returns aren’t sky-high. Here are some safer ways to invest and grow your crypto holdings:
Copy Trading: Don’t have the time to sit and trade all day? Copy the moves of seasoned traders. Platforms like Binance offer copy trading options, letting you piggyback off the best in the business.
Futures Trading: If you’re experienced and ready for higher risk, futures trading could be a profitable venture. But remember, it’s not for the faint of heart.
Staking: Put your crypto to work by staking it on a blockchain. You’ll earn rewards without lifting a finger.
Yield Farming: Lend your crypto out and earn interest. It’s like lending money to earn passive income, but with crypto!
There are other methods like liquidity mining, lending, and more. Research each one carefully, and start small to test the waters. I have also covered that in the past. Read about various ways to earn passive crypto income and improve your portfolio.
Parting Shot
Let’s face it—the crypto market is a jungle. And just like in any jungle, there are predators waiting to feast on your ignorance, greed, or lack of experience. Before you jump into any crypto project, do your homework. It’s better to opt for safer investments with smaller yields than to risk it all on a platform that could collapse tomorrow.
Remember, crypto is about strategy, patience, and education. Stick to what you know, avoid the get-rich-quick schemes, and build your wealth steadily and securely.
FAQ
- Is there any way to recover funds lost in the CBEX Scam?
Unfortunately, recovery is highly unlikely. Some victims are forming class-action groups, but without knowing who operated CBEX or where they’re located, legal recourse is limited. Report your case to local authorities and the Cybercrime Division nonetheless. - How can I verify if a new platform is legitimate?
Check regulatory registrations at financial authorities like the SEC, FCA, or your local equivalent like CMA in Kenya. Use tools like CertiK’s Security Leaderboard and Trustfinance to validate platform security. Never trust a platform that can’t provide clear legal registration information. - Are all high-yield crypto opportunities scams?
Not all, but proceed with extreme caution. Legitimate high-yield opportunities typically involve higher risk, complex strategies, or newly emerging protocols. As a rule of thumb: if you don’t fully understand how the yield is generated, don’t invest. - Is PCEX associated with CBEX?
While no official connection has been proven, the striking similarities suggest PCEX may be operated by the same group or individuals familiar with CBEX’s operations. Treat it with the same level of suspicion.