Common Crypto Scams: How to Secure Your Assets

By Peculiar Ibeabuchi: Brand Communications Assistant, Yellow Card

There has been a rise in the number of online scams in recent times. It is important to note that cyber fraud prevails in different sectors such as banking, credit cards, mobile money, crypto, etc but for the purpose of this article, we will be focussing on the digital asset space. There is a reason why the space is targeted, and it is simple: more people are getting interested in this industry and trying to learn more about its vast potential as an alternative means of investing and saving.

A Chainanalysis report from January showed that crypto fraudsters are predicted to have taken 4,600,000,000 dollars ($4.6 Billion) from investors and users of cryptocurrencies in 2023 alone. This amounts to approximately 0.013% of all cryptocurrency transactions in 2023.

It is common knowledge that when something has a high potential for success and is popular, malicious schemes will begin to mimic the real thing, rob unsuspecting people of their hard-earned money, and bring a bad rep to legitimate platforms and businesses.

Another reason these scams have become prevalent is the lack of regulation in the industry. Crypto transactions are done over a decentralised network, which allows for anonymity, so it is hard and nearly impossible to trace the source of each transaction. Without a defined regulatory framework, scammers can get away without any consequences.

Speaking on how better regulations can help protect against these security threats, Uzoma James, the Yellow Card Regional Operations Manager in West Africa, shared her perspective on what is to come. She said, “Regulatory frameworks in the crypto industry are expected to evolve significantly over the next few years as governments and financial institutions work to address the challenges and risks associated with digital assets. I envision Sandbox environments becoming more common, allowing for controlled testing of new technologies while ensuring compliance. Therefore, fostering a stronger legal recourse for crypto scam victims, improved dispute resolution frameworks and recovery of lost assets can offer better protection and support for affected individuals.”