When your WhatsApp investment group becomes a legal problem

In April 2025, CBEX, a platform that promised high returns from “digital asset trading”, froze withdrawals and collapsed. Reports put the number of Nigerians who lost money at more than 600,000. The SEC said CBEX had never been registered, promised enforcement against its promoters, and warned social media influencers that promoting unregistered schemes could land them in trouble too.

Most people reading this will never run anything like CBEX. But the law being used against it can also reach smaller, friendlier arrangements:

• an estate or church group that pools money to buy a property and shares the rent;

• a WhatsApp group where one trusted member trades forex or crypto for everyone and pays a monthly return;

• a founder who raises money from fifty people on Instagram with a promise of 10% a month.

What changed in 2025

The Investments and Securities Act 2025 replaced the 2007 Act. Three changes matter here:

1. Tougher penalties. Running an illegal investment scheme can now lead to heavy fines and up to ten years in prison, and the SEC can seize assets tied to the scheme. Under the 2007 Act, the fine for an individual was ₦100,000.

2. Digital assets count. Virtual and digital assets are now treated as securities. “It’s crypto, not an investment” is no longer a defence.

3. Your chats are evidence. When it investigates a breach, the SEC can request records from telecom and internet providers, including the content of communications. A WhatsApp group is a written record of who promised what to whom.

Where the line sits

This is not a reason to stop saving together. A traditional ajo or esusu, where members contribute and each takes the pot in turn with no promised profit, is saving, not investing.

Risk rises with each of these that applies to your group:

1. The money comes from people beyond a small circle who know each other, especially through public posts or adverts.

2. Someone else manages the money, and members simply wait for a return.

3. A return is promised, especially a fixed or “guaranteed” one.

4. There is no registered entity, no separate bank account, no accounts anyone checks, and no SEC registration.

If your group meets the second and third points and is open to the public, it may be a collective investment scheme or an unregistered offer of securities. Those need SEC registration. Running one without it is exactly what the 2025 Act targets.

Our view

The SEC is right to be tough after CBEX. But toughness alone will push small groups further underground, not into compliance. Today, a twenty-person investment club that wants to do things properly has no simple, low-cost route to regulation, so most stay informal and hope.

We would like to see the SEC offer a light registration track for small, closed investment clubs: a cap on members and on money raised, plain disclosure rules and a duty to keep separate accounts. That would let honest groups step into the light and make the dishonest ones easier to spot.

Until then, use structures the law already recognises: a registered cooperative for group savings and lending, a properly incorporated company for a shared business, or an SEC-registered fund manager for investing.

What to do now

If you run or manage a group

• Stop promising fixed returns.

• Write down the rules: who holds the money, how decisions are made, how members leave and get paid out.

• Keep the money in an account in the name of a registered entity, not a member’s personal account.

• If the group has grown beyond people who know each other, speak to a lawyer before you take in new money.

If you are invited to invest

• Check the SEC’s online register of capital market operators before you pay anything.

• Treat “guaranteed” high monthly returns as a warning sign, not a selling point.

If you promote investments online

• Ask for proof of SEC registration before you post. The SEC has said promoters of unregistered schemes are in its sights.