NFIU Issues Red Alert on Chinmark Group Ponzi Scheme, Unveils New Patterns
By Patience Ikpeme
The Nigeria Financial Intelligence Unit (NFIU) has issued a strong warning to the investing public, urging vigilance against the operations of the Chinmark Group Ponzi Scheme.
According to the NFIU, Chinmark presented itself as a diversified conglomerate with interests spanning real estate, logistics under the name Chinmark Haulage, agriculture, hospitality, and healthcare through Chinmark Medical. The scheme cultivated an image associated with religious values, philanthropy, and youth empowerment to attract investors.
The NFIU revealed that Chinmark successfully built investor trust through extensive use of social media platforms such as Instagram and Facebook, coupled with endorsements from various social media influencers. The scheme promoted fixed investment packages that promised monthly Returns on Investment (ROI) ranging from 3% to 4%.
In response to the proliferation of such investment schemes between 2022 and 2025, the NFIU has released a new advisory aimed at drawing renewed public attention to emerging patterns of Ponzi schemes within Nigeria. These schemes, the NFIU stated, often operate under enticing names designed to mislead investors with promises of substantial returns within short periods.
Investment amounts in these schemes typically ranged from N100,000 to N10 million or even higher. Notably, Chinmark accepted Bitcoin (BTC) and USDT (Tether), particularly from Nigerians residing in the diaspora, and utilized crypto Over-The-Counter (OTC) agents to convert these digital assets into Naira. The scheme also assured international investors of seamless entry and exit through cryptocurrency channels.
The NFIU’s investigation uncovered that Chinmark asserted investor funds were being utilized for asset-backed businesses, primarily in the haulage and real estate sectors. In the initial stages, the payment of promised ROI was consistent, a characteristic of classic Ponzi schemes designed to build initial confidence. Chinmark actively encouraged compounding, where investors reinvested their returns, and referrals, which broadened the scheme’s reach.
The scheme heavily relied on social proof, showcasing photographs of trucks, medical centers, and buildings, many of which were later found to be unverified or non-functional. By late 2021, delays in ROI payments began to surface, triggering widespread panic among investors.
They were urged to exercise patience due to purported “cash flow issues.” Subsequently, allegations of non-existent haulage contracts, misappropriation of funds, and the use of new investor money to pay off earlier investors – a hallmark of Ponzi behavior – began to emerge.
Thousands of investors suffered significant financial losses, with some reports suggesting a total loss exceeding N10 billion. Consequently, numerous investors formed victim groups and filed petitions with law enforcement agencies.
The NFIU further disclosed that Chinmark lacked the necessary licenses from the Securities and Exchange Commission (SEC) Nigeria for investment fund management and from the Central Bank of Nigeria (CBN) for accepting deposits. The scheme operated within a legal grey area, strategically leveraging branding, faith-based narratives, and cryptocurrency channels to evade regulatory scrutiny.
The NFIU cautioned that the promise of high returns is particularly appealing to individuals facing financial difficulties, making them more susceptible to irrational risk-taking driven by desperation or hope. This vulnerability often leads them to disregard warnings issued by regulatory authorities.
This updated advisory from the NFIU aims to enhance stakeholder awareness regarding recent Ponzi-style schemes employed to defraud the public and to remind financial institutions (FIs) and designated non-financial businesses and professionals (DNFBPs) of their obligations in mitigating such fraudulent activities.
The NFIU observed an emerging trend in Ponzi schemes, with a significant focus on digital assets, as a majority of the schemes flagged by law enforcement operate within this space. This development is potentially linked to the increasing adoption of digital assets by Nigerians to promote financial inclusion and facilitate commerce. Following digital asset-related schemes, sector-based investment schemes, particularly in agriculture and real estate, represent the next most common types. The NFIU noted that most Ponzi schemes in Nigeria exhibit characteristics drawn from these key categories.
The NFIU raised the alarm that digital assets have become attractive tools for Ponzi scheme operators due to their inherent anonymity, ease of transfer, limited regulatory oversight, and global accessibility. These schemes often employ tactics such as creating and promoting fake digital assets or tokens falsely claiming backing by blockchain projects or crypto mining operations and promising unrealistic returns.
They may also falsely claim the use of artificial intelligence or trading bots to generate high yields from crypto markets. Many digital Ponzi schemes utilize Multi-level marketing (MLM) structures, incentivizing recruitment with commissions from new deposits. Operators might use privacy-enhancing digital assets or mixing services to obscure fund flows.
Frequently, these schemes and their operators lack registration or licenses from financial regulatory bodies. The NFIU noted the use of complex technical terms to appear sophisticated while assuring ease of trading, and the emphasis on false affiliations with reputable entities to build public confidence.
The NFIU also outlined several Red Flags and Indicators specific to Digital asset-related Ponzi schemes, including promises of unrealistic or guaranteed returns, lack of regulatory licensing or oversight, an overemphasis on referrals, opaque business models, the use of newly created or unknown tokens, fake partnerships and credentials, pressure to act quickly, restricted withdrawals or locked funds, primary operation on social media or messaging apps, no independent audits or blockchain transparency, and the use of shell companies.
The NFIU also identified Potential Digital asset-related Ponzi schemes Nigerians should be aware of, including eWealth Connect (EWC), WWCoin (aka TOFRO), Delux, and ADK, detailing their purported operations and highlighting red flags associated with each.
Furthermore, the NFIU addressed Agriculture Ponzi schemes, describing them as fraudulent investment operations promising high returns based on claimed investments in agricultural activities, with returns not aligned with agricultural cycles but reliant on new investor funds. Examples include Farmforte Ltd & Agro Partnership Tech, Green Eagles Agribusiness Solution Ltd, Farm4Me Agriculture Ltd, Crowdyvest Ltd, West Agro Agriculture and Food Processing Ltd, and 360 Agric Partners Ltd. Characteristics include unrealistic returns, complex or vague business models, an overemphasis on referrals, a lack of transparency in fundamentals, unusual use of social proof and influencers, and pressure to invest quickly.
The NFIU also provided Generic Red Flags and Indicators of a Ponzi Scheme applicable across various sectors, including promising unusually high returns without commensurate fundamentals, lacking operating licenses, using attractive referral schemes, paying earlier investors with new participant funds, providing frequent updates on supposed gains, using testimonials and influencers, encouraging continuous reinvestment, a preference to operate outside registered/licensed VASPs, highly complex or secretive business models, a lack of transparency and excuses or delays with information, utilizing bank accounts with no clear commercial substance or transacting with unregistered exchanges, and exhibiting high inflow volumes without a clear revenue model.
The NFIU issued several Recommendations for Regulatory Authorities, Reporting Entities, and the Public, urging vigilance, verification of registration, asking pertinent questions, being wary of unrealistic promises, not relying solely on testimonials, and reporting suspicious activities. Reporting entities were specifically reminded of their obligation to file Suspicious Transaction Reports (STRs) for any activity suggesting involvement in Ponzi schemes, with a warning against non-compliance.
