The rapid growth of financial technology across Africa has brought new opportunities for innovation and inclusion but it has also created fertile ground for fraud. A recent incident involving an investment platform known as CBEX has brought this reality into sharp focus. The platform has collapsed, with most of the impact felt in Nigeria and Kenya, though some people in Ghana have also been affected.

This development is a reminder of the urgent need to strengthen legal and regulatory safeguards in Ghana’s FinTech space. As lawyers operating at the intersection of finance, technology, and regulation, we believe this moment calls for reflection and action.

FINTECH’S PROMISE AND PERIL

In recent years, Ghana has seen a surge in financial innovation. From mobile payment systems to blockchain applications, the sector is growing rapidly. The Bank of Ghana has supported these developments through initiatives such as the Ghana Interbank Payment and Settlement Systems (GhIPSS) and the regulatory sandbox for fintech start-ups.

Yet, alongside legitimate innovation, we have seen a parallel rise in fraudulent platforms operating under the guise of high-tech investment services. The cross-border nature of such schemes makes them particularly difficult to police, especially when cryptocurrencies are involved.

WHAT HAPPENED WITH CBEX?

CBEX presented itself as a platform for trading digital assets claiming to use artificial intelligence to generate profits. It promised high returns on short-term investments and encouraged users to bring in more participants through referral bonuses. However, according to credible reports from Nigeria, Kenya and Ghana, many users were later unable to access their funds. The platform attributed the issue to a “security breach” and requested further deposits from users to “unlock” their accounts, a classic tactic of financial fraud.

Blockchain tracking and forensic analysis indicated that user deposits were moved through a complex web of cryptocurrency wallets and ultimately routed to platforms linked to illicit activity. While exact figures are still being verified, initial estimates suggest losses amounting to millions of dollars across several countries.

Although the largest number of reported victims are from Nigeria and Kenya, reliable sources suggest that some Ghanaians also participated in the scheme. Unfortunately, due to the anonymity of cryptocurrency transactions and the lack of a central oversight body, recovering the lost funds will be extremely difficult.

REGULATORY IMPLICATIONS FOR GHANA

Currently, cryptocurrencies are not recognized as legal tender in Ghana. On 22 January 2018, the Bank of Ghana issued Notice No. BG/GOV/SEC/2018/02, stating that the use, holding, and trading of virtual or digital currencies were not licensed under the Payments System Act, 2003 (Act 662). Subsequently, on 9 March 2022, the Bank issued Notice No. BG/GOV/SEC/2022/03, once again urging the public to exercise caution when dealing with digital assets and unlicensed investment platforms.

The Securities Industry Act, 2016 (Act 929) and the Payment Systems and Services Act, 2019 (Act 987) provide some tools for addressing digital fraud, but these statutes were not drafted with crypto assets in mind. This creates significant enforcement challenges

In response, the Bank of Ghana has since issued Draft Guidelines on Digital Assets in August 2024 as part of its efforts to regulate virtual asset service providers (VASPs) and other stakeholders in the digital assets ecosystem. These Draft Guidelines propose measures to address risks such as money laundering, fraud, and consumer protection, while promoting innovation. While the guidelines are still in draft form and await formal adoption, they signal that Ghana is moving toward a more comprehensive legal and regulatory framework for the FinTech and cryptocurrency sectors.

The Draft Guidelines acknowledge the opportunities that digital assets present, such as facilitating cross-border payments, supporting international remittances, and improving transparency through asset tokenization. However, the Bank also recognizes the risks associated with these technologies, particularly around consumer protection and the potential for financial crimes.

KEY POINTS FROM THE DRAFT GUIDELINES

The Draft Guidelines provide insight into how Ghana plans to regulate the digital assets sector. Some of the key provisions include:

• Virtual Asset Service Providers (VASPs): The Bank proposes that VASPs, which include exchanges, wallet providers, and other service platforms, be regulated to ensure compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) protocols. This includes performing customer due diligence, monitoring transactions, and reporting suspicious activities to the Financial Intelligence Centre (FIC).
• Regulatory Scope: The proposed framework will cover various aspects of digital asset transactions, including exchanges, trading, and custody services. The Bank also plans to collaborate with the Securities and Exchange Commission (SEC) to ensure complementary regulatory frameworks that address different use cases of digital assets.
• Registration Requirements: VASPs operating in Ghana will be required to register with the Bank of Ghana or the SEC, depending on the nature of their services. The registration process will involve providing detailed company profiles, governance structures, audited financials, and a description of their technology, cybersecurity practices, and consumer protection measures.
• Stablecoins and Other Digital Assets: Stablecoins, which are pegged to fiat currencies or commodities to maintain stable value, are also addressed in the guidelines. The regulation aims to ensure that these digital assets do not pose systemic risks to the financial sector while allowing innovation to continue.
• Consumer Protection and Risk Disclosure: The guidelines emphasize the need for VASPs to educate users on the risks associated with digital asset transactions and ensure that clear risk disclosures are provided.

THE NEED FOR CLEAR LEGAL FRAMEWORKS

The CBEX incident underscores the urgent need for Ghana to establish clear legal definitions, licensing procedures, and enforcement protocols for digital finance. As many of these fraudulent schemes operate across multiple jurisdictions, regional cooperation will also be critical. The rise of decentralized platforms and the pseudonymous nature of cryptocurrency transactions make global regulatory coordination essential to combat these frauds.

THE ROLE OF LAWYERS

FinTech lawyers have a crucial role to play in this evolving environment. In addition to advising start-ups on compliance, lawyers should contribute to public education campaigns that help individuals and businesses distinguish between legitimate services and fraudulent schemes.

For clients in the financial services sector, lawyers should assist in developing internal compliance protocols, conducting due diligence on potential partners, and staying informed on the latest trends in digital asset regulation.

For regulators, collaboration with legal professionals is vital to crafting practical and enforceable laws. Lawyers can help ensure that regulatory frameworks are not only robust but also adaptable to the rapid pace of technological change.

A CALL TO ACTION

The fallout from CBEX is a sobering reminder that technology alone cannot guarantee financial security. Legal frameworks must evolve alongside innovation, and investor protection must remain a top priority. As Ghana continues to embrace FinTech, the time has come to build the necessary legal infrastructure to prevent abuse, protect consumers, and preserve trust in the financial system.