Crypto traders in Africa are less likely to be scammed than traders in other regions in the past year

In the “2020 Geography of Cryptocurrency Report” by Chainalysis, the company stated that the rate of illegal cryptocurrency activity related to scams is not as high in Africa as in other regions of the world. This shows that traders in Africa are less likely to be scammed than most traders in different areas over the past year.

Crypto traders in Africa are less likely to be scammed than traders in other regions in the past year

Illegal crypto activity accounts for only 2% of the region’s total transaction volume of about $ 16 billion between July 2019 and June 2020. Scams account for 55% of a low level of illegal activity.

crypto-traders-in-africa-are-less-likely-to-be-scammed

Source: Chainalysis

Stated statement:

“People in many parts of Africa have fallen victim to financial scams common in the fiat world, such as pyramid schemes and other investment scams. While scams still make up a large portion of illicit cryptocurrency activity in Africa, the share isn’t as high as it is elsewhere.”

However, in Eastern Europe, where illegal transactions were six times higher than Africa’s figures for all crypto volumes for that year, many are likely to fall into pyramid schemes cryptocurrency and giveaway scam. The scam has compromised 50% of all cryptocurrencies in the region with a much higher level of illegal trading, and Eastern Europe is a hotspot of darknet activity. East Asian traders are most likely to be scammed, with 86% of all illegal cryptocurrencies sent for scam purposes.

crypto-traders-in-africa-are-less-likely-to-be-scammed1

Source: Chainalysis

So how are the numbers in Africa so low compared to other regions, often linked with crypto Ponzi schemes and Nigerian princes?

It’s hard to say, but the report notes that the perception of phishing, in general, has made it difficult to convince African users even to try crypto platforms like Paxful, meaning those who are brave enough are probably highly cognizant of the possibility of scams.

rowing crypto education may be another explanation. Binance South Africa country manager Tanya Knowles said in March that:

“The best approach crypto traders in the country can take is to ensure there is education around scams … we need to get the basics in place before we open it up and say, go wild and start trading.”

One of the current leaders in blockchain and crypto education in Africa has been a victim of crypto scams. Doris Ojuedeire founded the non-profit organization Blockchain African Ladies and the Crypto Lioness platform, aiming to educate women about blockchain and cryptocurrency trading.

How Bitcoin met the real world in Africa

Monthly cryptocurrency transfers to and from Africa of under $10,000 – typically made by individuals and small businesses – jumped more than 55% in a year to reach $316 million in June, the data from U.S. blockchain research firm Chainalysis shows.

The number of monthly transfers also rose by almost half, surpassing 600,700, which says the research is the most comprehensive effort yet to map out global crypto use. Much of the activity took place in Nigeria, the continent’s biggest economy, along with South Africa and Kenya.

This represents a reversal for bitcoin which, despite its birth as a payments tool over a decade ago, has mainly been used for speculation by financial traders rather than for commerce.

Why a boom in Africa? Young, tech-savvy populations that have adapted quickly to bitcoin; weaker local currencies that make it harder to get dollars, the de facto currency of global trade; and complex bureaucracy that complicates money transfers.

The Bitcoin users interviewed by Reuters, based in five countries from Nigeria to Botswana, said the cryptocurrency was helping people make their businesses nimbler and more profitable, and helping those working in places like Europe and North America hang on to more of the earnings they send home.

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