Nigeria is turning into a den of cryptocurrency scams as more and more fraudsters are targeting locals to pull off scams, according to a study by Israeli blockchain analytics firm, Whitestream.
Crypto media Coindesk reported that the blockchain analytics firm uncovered four recent cryptocurrency scams which originated from the Nigerian capital Lagos.
Most of these scams are originating on the popular social media platform Instagram, where the scammers create a persona of luxurious life achieved from the wealth created with cryptocurrency investments. These profiles try to emulate profiles in the United States or Europe, but in reality, they were created in Nigeria.
The perpetrators try to lure new crypto investors with pictures of a wealthy lifestyle and then convince them into making crypto investments through private chats with promises of high returns. After receiving funds from the victims, the scammers usually liquidate them on exchanges like Binance.
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Recently, these scams have become rampant, and the analytics company estimates that they are receiving tens of thousands of dollars every month from the victims.
Crypto Ban Is to Curb Frauds
The Nigerian central bank recently imposed a ban on banks and financial institutions from serving crypto companies and individuals indulging in crypto transactions. Whitestream believes that the ban was pushed due to the rising scams in the country.
Cryptocurrency is very popular in Nigeria. With its weak economic conditions, people from all income levels are investing in digital currencies. The government ban to save Nigerians from dubious investments might backfire as people are now more vulnerable to purchase from a non-regulated source.
However, Whitestream CEO Itsik Levy believes that it is the responsibility of Facebook to take action against these accounts. “The accounts are still active, and the scam is still attracting new people. It makes no sense,” Levy told the crypto publication.