Africa may have the smallest cryptocurrency market globally, but according to Bitcoin magazine, Africa is the third fastest-growing cryptocurrency market in the world. The continent is booming in cryptocurrency adoption, with several players, ranging from individuals and entrepreneurs to small businesses and other financial institutions developing an interest in cryptocurrency. Individuals, in particular, are interested in learning more about crypto, while others are ready to invest in this relatively new frontier.
Since the African crypto market is still new, with people learning about the space, and others embracing the new investment bus, Africa has become the new playground for crypto scams. There is a lot of misinformation and controversy surrounding cryptocurrencies, especially in African counties with mass adoption including Nigeria, Kenya, Tanzania, and South Africa¹. Devious players in this new frontier thrive in the misinformation and controversies, to defraud hardworking Africans of their hard-earned cash.
Once you learn and understand the dynamics of the new digital mechanisms known as cryptocurrencies, you quickly notice the risks involved in the transactions in these digital mechanisms. This however is not about the volatility of the market. Volatility will still be part of cryptocurrency because of its newness². It is important to appreciate the volatility because all new things take time to be accepted and the same applies to cryptocurrencies.
The online space has many scams, and the cryptocurrency frontier is no different. As you make your way in understanding this new frontier, it is important to be aware of the possibilities of losing your investments in common scams. Below are some common scams that you can avoid as you seek to make the best of your investments in cryptocurrencies.
Misleading Social Media Updates
It can be easy to identify a celebrity in social media, from an imposter. Celebrities have verified accounts, while imposters simply try to emulate the celebrities’ style of social media posting. In crypto, there are several malicious impersonator bots in the crypto space. It is therefore critical to filter every information that comes from social media platforms such as Facebook and Twitter. This especially works when you identify impossible results that are very tempting. These could be misleading and could cost you your investments. Africans have fallen for these impersonator bots because of a lack of information on how to identify the impersonator bots. One of the best ways Africans can filter away the frauds is to identify people from these platforms who ask for money. If anyone asks for money from these platforms, there is a minimal chance that you will recover the money³. It is best to cut association with such accounts and all other affiliated accounts.
Just like imposter social media accounts, there are imposter websites. In a booming cryptocurrency market such as Africa, there is a large number of websites that have been set up to resemble original and genuine startup companies. Genuine startup companies are making great economic changes in Africa, but imposter websites are set up to trap gullible Africans seeking to make the most of their investments with startup companies. When visiting a crypto website, you should look out for a small lock indicating security on the left side of the URL bar⁴. If “https” is conspicuously missing in the URL link, it is probably wise to shut down the web page. It is also important to beware of referral links in genuine websites, as they may be paths to imposter websites.
Emails from Scammers
Emails from scammers often look identical to emails from genuine cryptocurrency companies. In markets such as Africa where there is a rush to make the most of these investments, it is important to have an eye for detail. You must verify the email is connected to the company in question. The other thing to look out for is logo and branding. There may be negligible differences in logo and branding, but these are what would help you avoid being a victim of scams. These emails often have fake Initial Coin Offerings, meant to draw funds from investors⁵. It is important to look at the details and study them critically, before responding to random crypto emails.
Replica Mobile Applications
Scammers have infiltrated the African market with fake mobile apps, which closely resemble genuine mobile crypto apps. This mostly affects android users, who make up the vast majority of mobile phone users in the African market. In as much as Google Play and other stakeholders are quick to find these apps and flag them, the infiltration is still widespread, with the possibility of sharing fake crypto apps on other social media platforms such as Telegram and WhatsApp. The best way to identify these fake apps is to look out for the misspellings and the inauthentic branding of the apps⁶. These fake cryptocurrency apps are one of the easiest ways to fall prey to scammers.
Africa is a developing continent. The systems do not operate seamlessly compared to developed countries such as those in the West. This means Africa is still battling with problems such as high unemployment rates, which leaves the African population in desperation. It is in this desperation that scammers thrive. There have been startups that have made it their mission to sensitize Africans on safety tips while treading on the murky crypto waters. Sankore 2.0 is one such company, which seeks to educate Africans on blockchain and cryptocurrency. Sankore 2.0 further seeks to create blockchain solutions for Africa. The education is part of the sensitization project which seeks to equip Africans with comprehensive knowledge on blockchain and cryptocurrency. This will help the Africans avoid traps by scammers and safely invest in this relatively new market.
Sankore 2.0 is an Africa-focused community integrating the NEAR blockchain with projects and solutions conceived and built by local developers in Kenya. As noted in the content of this blog, Sankore 2.0 seeks to promote the development of Web3 products in Nairobi — for Kenya and for Africa as a whole