The growth momentum of cryptocurrency at Nigeria faces a threat from scams

Nigeria is the first African country to accept cryptocurrency. And also, because of that, the country’s crime rate is much higher than in other African countries. And to this day, the Stakeholders in the Blockchain Technology Association of Nigeria (SIBAN) is one organization sounding the alarm.

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Phishing is a significant threat to the acceptance of cryptocurrency at Nigeria

According to statistics, citizens of the West African state are now using cryptocurrencies for cross-border payments as well as increasing international money transfers. And this momentum faces a threat from crypto-related scams. Besides, the COVID-19 pandemic seems to be opening a new path for criminals.

Up to this point, SIBAN has been mandated to promote the adoption of cryptocurrencies as well as ensure consumer protection against cryptocurrency scams. The organization believes that if left unchecked, this would not only hinder further growth of the crypto space but could reverse the public’s belief in emerging technology.

Senator Iyere Ihenyen, General Secretary (GS) of SIBAN, explained why Nigeria has been struggling with scams for years:

“So, to understand the rising rate of scams in Nigeria, it is vital to understand the context. A country of over 200 million people with a high rate of youth unemployment and underemployment, Nigeria, has unfortunately made itself a haven for scammers.”

As Ihenyen observes, scammers are now gearing up for the growing popularity of blockchain and cryptocurrencies for scams. Inksnation, an investment platform that has been considered by some Nigerians to be a scam, is the most famous, allegedly defrauded in December 2019.

General Secretary (GS) shares:

“Inksnation is not on any blockchain. Its Inksledger, which it claims to be its blockchain, is not public and may as well be inexistent. There is no whitepaper. In Inksnation’s team is the founder himself (as Daddy Ink) and Elohim Jahgah God the Trinity Trustor & Grantor Inksnation.”

According to Ihenyen, Inksnation represents scams that often take advantage of Nigeria’s economic situation to deceive thousands of investors. So far, SIBAN and Nigeria’s Securities and Exchange Commission (SEC) has issued public warnings to the public about Inksnation. Predictably, the warnings did not stop Inksnation from inviting more Nigerians to invest in it.

According to Ihenyen, there are two possible reasons why Inksnation does not seem to be skeptical of users and why Nigerians appear indifferent to warnings:

“Inksnation is aware that SIBAN can only issue advisories but lacks the power to enforce or to make arrests. On the other hand, the SEC may be in a position to cause an action to be taken against Inksnation. However, by deliberately labeling itself as a blockchain entity, an unlimited space, it means the regulator lacks sufficient legal grounds to take action.”

People are still too lacking vigilance and greed

When SIBAN issued a warning against Inksnation, it received criticism instead of praise. Therefore, Inksnation continued to operate unimpeded. Because Inksnation’s profits are too significant and the people are too greedy.

In the meantime, Ethereum Million Money and Forsage are two other investment platforms that have been on the trend of fraud since March. Ethereum Million Money is a multi-level marketing scam that has some investors already counting losses. Similarly, a report by behindmlm.com – a scam tracking website – seemingly backs Ihenyen’s claim about Forsage. Regulators have also flagged Forsage in the Philippines. SIBAN had just received fresh complaints about another possible scam, Lionshare.

Ihenyen stated:

“SIBAN is planning to do to curb incidences of cryptocurrency scams. They are looking to collaborate with like-minded institutions in raising awareness. SIBAN plans to partner with Blockchain Nigeria User Group (BNUG), the Cryptography Development Initiative of Nigeria (CDIN), and other bodies in the space to launch the Anti-Scam Alert Project (ASAP).”

SIBAN has a particular blockchain education project loading, in collaboration with select local and global blockchain & crypto platforms.

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