Fraudsters are profiting from the ignorance of people who are new to cryptocurrencies, especially in developing countries. These scammers know just how well to capitalize on the 2017 bull run as they promise investors huge returns within a short period.
According to local media in Nigeria, the country’s law enforcement agencies are seemingly helpless as large scale fraudulent cryptocurrency firms victimize millions of unsuspecting Nigerians.
Escaping The Failing Economy
Greed may be a common reason why people lose their money to fraudulent schemes. However, many of these Nigerian investors are also seeking new ways to make quick and extra profits as the nation’s economy continues to fail under the current administration. Unfortunately, they end up losing the little money they have.
As per the report, the firms pretend to be genuine, but in reality, they are nothing but pyramid and Ponzi schemes. Some owners of these schemes tell investors that they generate revenue by speculating on the price movement of cryptocurrencies via a CFD trading account. Others just claim they profit from buying and selling different coins via exchanges.
Nigerian Authorities Know Little About Cryptos
As Nigerians continue to lose millions to crypto scams, regulatory authorities in the country seem mute and unable to take corrective actions to protect investors against fraud.
Speaking to the media, Anthony Ogbo, a cybersecurity expert, said that the government needs to create a robust financial system and regulation to accommodate cryptocurrencies. Until that happens, investors will continue to fall victim to scams.
“Unfortunately, we lack the ability to keep up with the fast-changing digital space. And the authorities are not helping matters; they are so lethargic,” Ogbo added.
Perhaps the reason for this is because the authorities, especially the Nigerian Police, know little about cryptocurrencies and blockchain technology.
One of the victims of such schemes, Binus Yaro, said he could not get any justice after filing a complaint with the police that he had been scammed. The police could not even invite the promoter of the scheme, he said, adding that he lost his hard-earned money just like that.
Perhaps what the police know how to do best is to harass innocent Nigerian youths who are legitimately earning online via cryptocurrency trading and other forms of digital businesses while ignoring the real culprits.
Although the country’s Security and Exchange Commission (SEC) said it is developing a regulatory framework for the digital currency sector, providing crypto education for law enforcement agencies, would go way in protecting investors.