African investors may have shared the least percentage of investment scams in cryptocurrency which reached $5.9 billion globally last year.
But the continent’s investors were scammed more through investment and giveaway tricks, signalling the risk of high appetite to buy into the craze.
Kenya, Nigeria, and South Africa ranked among the leading countries from where scammers, using these guiles, generated the most revenue per user last year, according to a report by blockchain analysis firm Chainalysis.
Giveaway scams — where swindlers trick users into sending them their crypto assets promising to send them more in return — were particularly more prominent in Kenya and Nigeria, which are also the leading in crypto adoption on the continent.
South Africans mostly fell victim to investment scams — where the fraudsters promote a non-existent investment company promising huge returns — occasioned by little and mis-information in the sector.
However, several other types of scamming in the crypto industry spared the African populace, while affecting investors in North America, Europe, Australia and Asia, where crypto adoption levels are higher.
Romance scams, for instance, which defrauded some $15,559 per user last year, and impersonation scams which ripped every investor off averagely $5,746, were mostly in the US, Canada, Europe and Australia.
Africa’s leading guiles — giveaway and investment cons — cost victims averagely $1,834 and $995 respectively, while Non-Fungible Token (NFT) fraud lost each user about $462 each.
Chainalysis says, the locations of those who fell victim to crypto scams last year were “likely due to the location of the scammers themselves, as this will impact their ability to pitch victims based on their shared language and cultural context.”
“But the geographic trends in scamming also match the geographic trends we have seen in the wider cryptocurrency ecosystem” Chainalysis said.