Why crypto is the new scammer’s paradise

Bitcoin

Cryptocurrency is traded in crypto exchange forums, a largely unregulated field, although many credible crypto forums exist.

Photo credit: File | Nation Media Group

Over the past three years, the global financial system has experienced milestones because of the evolution of cryptocurrency (crypto), a virtual (digital) currency that uses cryptography to secure transactions.

Every world investor is talking about non-fungible token (NFT), the unique digital asset that represents ownership of real-world items such as art, video clips and music; or blockchain, a system of recording information in a way that makes it difficult or impossible to change, hack or cheat the system. You’ll hear Binance, an online exchange where users can trade cryptocurrencies; and many more crypto terms.

Elon Musk, one of the wealthiest entrepreneurs, predicts that with time one Bitcoin will be worth $100,000 (Sh 11.4 million). This, of course, sounds like a good idea for investors and entrepreneurs, the economy and also jobs.

But not all that glitters is gold, so goes the adage. Scammers are now more alert to make their smart moves. Since the main aim of cryptocurrency is to move the world from physical money and over-reliance on banks to digital currencies using technology, hackers and other unscrupulous internet gurus have taken advantage of this invention to scam investors in the name of trading.

In Kenya, for example, many people, especially the youth, have lost millions of dollars to fake crypto sites, official reports say. One of the latest reported cases involved a company called Bitstream Circle, where the masterminds are alleged to have stolen almost $10 million (Sh1.1 billion) from its clients. More disturbing is how the scammers robbed the investors without anybody ever suspecting it was a Ponzi scheme. The perpetrators used technology at its best to make it look real.

Cryptocurrency might be the next big thing, especially in our financial system, just as smartphones changed not only our way of communication but also daily lives. But without thorough teaching and research beforehand, people who engage in the crypto economy could continue losing huge amounts of money to smart scammers.

The government should, therefore, come up with strategies to enlighten the citizens about the crypto economy, especially the risks involved. That can be done through mainstream media, social media platforms such as Twitter spaces, Instagram reels, YouTube channels, Telegram forums and Facebook Live.

It can be done even in schools too, as in countries like China, where crypto experts educate people about such things as blockchain, NFTs, crypto, coins (currency units, which are stored in virtual ‘wallets’), tokens (digital assets that are built on another cryptocurrency’s blockchain) and DeFi (decentralised finance).

Potential investors, on the other hand, should take the initiative to understand fully what crypto currencies entail before dealing in them.

Leakey Odidi, Bungoma

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