Nigeria Sees A Rise In Crypto Scams

With the growing popularity of cryptocurrency, there is also a progressive growth in crypto fraud.

Nigeria is the latest country to fall prey to cryptocurrency scams and frauds. It is gradually turning into a hub of scams as more and more imposters are aiming at natives to pull off scams. This was revealed in a study by Whitestream which is an Israeli blockchain analytics firm.

According to the crypto forum Coindesk, the blockchain analytics firm unearthed four latest crypto-related frauds. All of these scams happened to originate from Nigeria’s former capital, Lagos.

What is surprising to note is that most of these scams are being carried out through the social networking service, Instagram. Instagram, owned by Facebook, allows users to share photos and videos without revealing much about their identity and whereabouts. These fraudsters create a façade of the sumptuous life attained from the wealth acquired with crypto funds and investments. What is more interesting is that while the profiles are created in Nigeria, they try to imitate profiles in the US or Europe.

The con artists try to entice new investors with photos of a luxurious lifestyle and then influence them into investing in crypto. All this is done through personal chats with promises of high profits and returns. After the funds have been obtained from the victims, the scammers discharge them on crypto exchanges such as Binance. It is only later that the victim realizes he has been duped and swindled out of all their investments.

Lately, rampant growth has been seen in the number of these scams. Analysts have estimated that these scammers are getting tens and thousands of dollars each month from those they cheat.

The central bank of Nigeria had recently forbade regulated financial institutions and banks from offering their services to crypto firms and investors. There was also a ban on serving people who indulged in crypto transactions. While such a step by the central bank initially received a lot of criticism, crypto analysts probably now see the positives.  For instance, the Israeli analytic firm believes that the prohibition was imposed because of the increasing scams in the country.

Cryptocurrency has gained a lot of popularity in Nigeria over time. The country’s feeble economic condition has propelled people from all income groups to invest in digital assets. The ban by the Nigerian government to protect its people from crypto-related fraudulent activities might backfire. More and more people are now susceptible to purchasing from a non-regulated financial asset.

However, it is still not too late and Facebook ought to take action against these fake and fraudulent profiles. It shouldn’t be hard for Facebook and Instagram developers to detect these sham profiles and block them.