Although Africa is the world’s smallest cryptocurrency economy, with its centralized trading representing less than 1 percent of the world’s volume, the continent has become a playground for fraudsters. A legitimate exploration of cryptocurrency in Africa could grow commerce on the continent, but the rise of financial crime in the sector could hinder this growth.
Major scams since 2020
Two major crypto scams have shocked the world in recent times:
The South African Mirror Trading International crypto scam in which hundreds of thousands of people lost $588 million in Bitcoin in 2020.
In 2021, another South African through Africrypt swindled investors of $3.6 billion.
The above scams and others recorded globally are possible through anonymity that exists with blockchain technology. Although cryptography secures bitcoin users, security agencies can trace fraudsters via the email addresses used to perform the account fraud. In the meantime, many alt coins have not addressed this gap, therefore providing crypto users with absolute anonymity.
How to secure your cryptos
Research by leading experts in the financial technology sector has recommended that the safety of cryptocurrencies depends on how users protect their private key. The results by experts advised that crypto users should undertake the following basic routine changes:
- Protect their private keys offline or on a proprietary online wallet.
- Crypto users should also avoid visiting unsecured web pages, or responding to scam messages as these can damage malware on devices.
- Avoid overpromising investments. That is an investment that promises 100% returns, while bitcoin is barely averaging a 9% weekly gain.
What you should know
Nigeria is the second largest cryptocurrency market in Africa after South Africa. This is despite the ban on cryptocurrency trading by the Central Bank of Nigeria.
Paxful, a major peer-to-peer cryptocurrency platform in Nigeria, disclosed that the country averaged 16,000 daily trades in 2021, making it the platform’s largest transacting country.