Kenyans, just like the rest of the world has joined the cryptocurrency landscape with so many people laying claim to making fortunes from it. In major cities across the country, especially the capital Nairobi, youths and young adults engage in cryptocurrency investment more like an ordinary gamble. As ambitious as their investment in cryptocurrency may seem, they easily fall victims to fraud.
Just right now, a cryptocurrency investment that has been unmasked as having been a ponzi scheme has left many investors reeling in loss. According to the Nation, Kenyans have lost billions in a fake cryptocurrency investment named Bitstream Circle.
Consistent cryptocurrency fraudster tricks
Fraudsters are everywhere and so the cryptocurrency market is no any different. The truth of the matter is that cryptocurrency investors have in various incidences lost money, big money to fraudsters. One may think that protecting cryptocurrency wallet and passwords is a full guarantee of safety. Far from it. Today, cryptocurrency fraudsters use psychological appeal to win trust of unsuspecting investors. Before you realize that it is a fraud, they have already made away with your would-be promise of riches.
We can almost all agree that financial technology is fast growing and bitcoin or Ethereum cannot remain the only players in the cryptocurrency industry. But in the same breath, we have to contend with the reality that mining cryptocurrency is a very hectic process which no ordinary person can engage in. No wonder people get their cryptocurrency investments trough exchanges. So why would there be such a fast rise in the number of cryptocurrency offerings? The answer to this will direct anyone who cares to think that it’s the new route for fraudsters.
To appeal to the inspecting yet overzealous investors, especially in emerging economies like Kenya, fraudster cryptocurrencies promise attractive returns on investments. In most cases, the investor is asked to consider cryptocurrency staking instead of actively engaging in direct buying and selling which would ordinarily be a great hassle.
It looks a lucrative deal to just put your money at a crypto and wait for a let’s say 10% daily return without having to keep monitoring the crazy volatility graphs. It is very difficult to resist an offer that you don’t need to do more than just bet your money and wait for it to generate a handsome return. It’s pretty much like the ordinary betting or gambling that people freely do today.
Lo and behold, here is where the fraudster finds the better of the unsuspecting investor and before long, a huge sum of money is gone. With all cryptocurrencies not being regulated by any central agency like a bank or government, there is nowhere to run to for help. Remember also, a cryptocurrency transaction once completed cannot be reversed.
Cryptocurrency fraudsters muddy the prospects of the fintech
Cryptocurrency is no doubt a talk of town and a trend which millennials will always spare time to discuss. But there is some genuine concern about how fast new cryptocurrencies are increasing by the day. From around 2009, bitcoin was the sole cryptocurrency offering but soon after in 2015 came Ethereum. In a span of 13 short years, the cryptocurrency landscape is dotted with more than 18,000 cryptocurrencies.
While the increase in cryptocurrencies in existence may mean that people are burning midnight oil to advance fintech, the reality is different. Cryptocurrency market has become the playground and den of fraudsters. It is not about emerging cryptos that promise investors overnight returns on their investments but also a naïve people whose raw appetite for fortunes set them on a self-destruction mode.
Even for the earliest cryptocurrency, bitcoin, so many questions have been hanging out and begging for answers. For instance, a mere loss of a password locks investors out of their billions of investments or a transaction initiated cannot be reversed. But one prominent question surrounds who exactly created bitcoin or the other cryptos in the market today.
The name Satoshi Nakamoto has always been loosely used to humanize the mysterious entity that created bitcoin. With so much opaqueness in crypto miners and owners plus the infiltration of the fraudsters, this would-be great invention may just suffer a fatal end.
Ways to avoid falling in the hands of crypto fraudsters
To be honest, fraudsters are not unique to cryptocurrency. Even in the normal banking sector, cases of hackers penetrating the established firewalls and making away with large sums of money are rife. So, to say that cryptocurrency is a den of fraudsters may be too mean and create make unfortunate case for its stoppage.
Knowing quite well that these fraudsters are not going away any sooner and that fintech must as matter of reality progress, any person starting investing in cryptocurrency, diversifying investments or just continuing should be on high alert.
To avoid falling prey to fraudsters in the cryptocurrency world, the following is the least one can do;
- Take time to gather enough knowledge and information about how cryptocurrency investment works. There are no shortcuts.
- Be very careful about cryptocurrencies that have just entered the market recently. Consider investing in established cryptocurrencies including bitcoin, Ethereum, dogecoin et cetera. At least they have a track record.
- Do not invest in only one cryptocurrency. Diversifying your investment portfolio spreads out the risks for you. Yes, it does not completely dissipate the possible loss but reduces the impacts.
- Work with well-known cryptocurrency exchanges. It does not work to just jump onto the next available investment option.
- Work from a basis that all cryptocurrencies are a fraud, unless proven otherwise. This will make you more careful and not naive.
