Nigerians Declare War on Cryptocurrency Scam

Cryptography Development Initiative in Nigeria (CDIN) has created a platform called the “Nigeria Blockchain Alliance” (NBA) which brings together law enforcement agents, legal practitioners, forensic investigators and government agencies among others to collaborate in the fight against cryptocurrency related crimes within the country.

The President of CDIN, Adeolu Fadele, tells Cointelegraph that this development is in support of the government’s efforts in fighting electronic fraud in Nigeria and to prevent fraudsters from giving the country a negative reputation in the new generation of digital innovation.

The government is always late

Dipo Fatokun, chairman of the Nigeria Electronic Fraud Forum and the director of Banking and Payments System of the Central Bank of Nigeria, acknowledged that fraudsters are usually quicker in catching onto new trends in the technological space within the country. Fatokun notes the need for regulators and operators in the Nigerian financial system to be well informed and not left out in the developmental processes of the Blockchain technology.

According to Obiora Awogu, a forensic analyst at UBA Group, today’s cryptocurrency scams in Nigeria seem to have taken over the old fashioned 419 scam.

“While it could be said that a lot of people fall for these scams because of greed, it is also evident that they may not have adequate knowledge about cryptocurrencies and its underlying technology. These people are lured into bogus pyramid and HYIP schemes using Bitcoins and other altcoins for payment,” says Awogu.

He also notes that fraudsters have capitalized on the ignorance of the participants of these schemes by pretending to sell Bitcoins and other cryptocurrencies at unbelievably low rates, thereby swindling their victims after payment has been made.

Awogu acknowledges the government’s efforts in fighting electronic fraud within the Nigerian financial ecosystem. However, he says that Bitcoin and other cryptocurrency scams are spreading so fast that the government is trying to play catch up.

Early success already recorded

Awogu tells Cointelegraph that Nigeria Blockchain Alliance successfully tackled a number of cryptocurrency scam cases in collaboration with banks and law enforcement agents.

“We recently set up a team to receive and confirm these scams and document and organize the evidence in a professional manner. This will also help in keeping an archive of known cryptocurrency fraudsters in the country,” he concludes.

CDIN President Adeolu Fadele tells Cointelegraph of his surprise at the number of reported cases of cryptocurrency scams within just one week of launching NBA. He describes the situation as “alarming.”

However, Fadele commends the efforts so far being made by the government in the achievement of the New Evidence Act 2011 and the Cybercrime Act 2015.

“Without these two legal provisions, the task of fighting cryptocurrency scams would have been more difficult,” says Fadele.

The government is handicapped

Fadele points out that government agencies may not have proper visibility into the activities going on in the unregulated ecosystems, like that of cryptocurrencies, and as a result will be limited in what they can do in such spaces. Thus, Nigeria Blockchain Alliance under CDIN will play a significant role in filling the vacuum hitherto created.

Fadele continues by explaining that Nigeria Blockchain Alliance is a voluntary organization comprised mainly of youths from different walks of life.

He says:

“It is important to understand at this point that the Nigeria Blockchain Alliance is only a voluntary service offered by well-meaning Nigerian youths from the public and private sectors including the law enforcement agencies, cybersecurity professionals, military personnel’s, legal practitioners, forensic investigators, bankers, merchants, private companies and regulatory authorities.”

A critical step to protect public safety

Despite being in its early stages, Fadele believes that Nigeria Blockchain Alliance is a critical step in protecting public safety by combating criminal activity in the cryptocurrency and Blockchain digital innovation space. He also believes that it is an important step for the growth of the Blockchain industry.

The short-term goal of NBA, according to Fadele, is to leverage the support of government agencies and stakeholder private organizations. It is hoped that this will reduce the rate at which people that are negatively motivated by the absence of regulatory framework can go in labeling Nigeria with another negative reputation in the new world of cryptocurrency and Blockchain digital innovation.

“In the long run, the CDIN hopes to collaborate with relevant government agencies and private institutions to develop a policy framework, create awareness, discourage crime, protect the public and unlock new jobs and business opportunities in the Nigerian cryptocurrency and Blockchain ecosystem,” concludes Fadele.


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