In December 2024, the Economic and Financial Crimes Commission (EFCC) arrested more than 800 individuals connected to cryptocurrency trading fraud. Between July 2023 and June 2024, the country received approximately $59 billion in cryptocurrency, reflecting its strong involvement with the population’s digital assets.
However, the prevalence of fraud is hampering the reputation of Nigerian cryptocurrency.
If cryptocurrency disappears today, fraudulent activities will not cease. The real problem is not cryptography, but what con artists use is a rich, rich spirit. From Ponzi schemes to fake investments, people around the world have long been targeted by scammers who promise unrealistic returns. Now, with the rise of digital assets, fraudsters simply find new playgrounds.
Crypto is responsible for deeper issues such as financial difficulties, lack of financial education, and regulatory loopholes. But is Crypto really a villain or is it just a tool being misused? The TRM Labs 2025 Crypto Crime Report shows an 51% decline in illegal transactions, but scammers have evolved with AI-powered scams, deepfake phishing and cross-chain laundering.
Why do people continue to fall into crypto fraud?
1. Economic despair
Increased inflation, limited employment opportunities and currency instability encourage many people to seek alternative ways to make money. Crypto offers opportunities, but with the wrong hands, it turns into a bait and switch scam.
2. Lack of crypto education
Many people don’t understand how blockchain and crypto works. Scammers will use this ignorance, promising guaranteed returns, fake trading bots, or non-existent tokens. A typical red flag? Investment schemes that promise daily or weekly returns are things that actual crypto investments do not offer.
3. Influencers and celebrities support
Scammers use popular figures to pay influencers to promote Ponzi schemes disguised as crypto opportunities. By the time the fraud collapsed, the promoters disappeared and left nothing to investors.
4. AI-powered fraud and financial grooming
According to TRM Labs, fraudsters are increasingly using AI-generated deepfakes, phishing messages and fake identities to appear more persuasive. A financial grooming scam, commonly known as “pig slaughter,” is growing.
Scams are nothing new in the digital age. Long before cryptocurrency, we:
Bank fraud – Fake Forex Investment Scheme.
Real Estate Scars – Developers who sell land they don’t own.
Ponzi Schemes – Returning to previous investors, they are paid using the capital of the new investor, not from the legitimate profits they have acquired. This unsustainable model eventually collapses when it becomes impossible to recruit enough new investors to pay profits to previous participants.
Also Read: Learning Crypto Volatile: Turning Market Cycles into Long-Term Opportunities
Today’s crypto fraud identifies the characteristics of the traditional fraud scheme mentioned above. However, crypto frauds move rapidly and once funds are lost, it is difficult to retrieve them. However, blockchain will make Crypto more traceable than cash, allowing law enforcement agencies to track transactions if they have the right tools. ”
The true role of blockchain in stopping fraud
1. The code is traceable
Unlike cash-based scams where money disappears, blockchain transactions are recorded forever. TRM Labs reports that illegal transactions have fallen by 51% thanks to improved tracking.
2. Regulated exchanges have security measures
A platform with the right KYC (knowing customers) makes it difficult for scammers to work. Users should always use reputable exchanges instead of random P2P transactions.
3. Blockchain forensic tools have been improved
Governments around the world are using forensic blockchain analysis to recover stolen cryptography. challenge? Many authorities lack the expertise and resources to effectively track stolen digital assets.
4. New tactics make crimes difficult to detect
TRM Labs notes that authorized entities and criminals are shifting from mixers to cross-chain bridges, making it difficult to track illegal funds.
What do I need to change?
1. Other Blockchain Education
People need to understand how cryptography actually works. Crypto-literacy must be as important as financial literacy.
2. Better regulations without throttling innovation
Instead of banning cryptography, countries need stronger penalties for fraudsters, consumer protection laws, and clearer industry guidelines.
3. Personal responsibility
The golden rule of investment applies here: if it seems too good, it is probably. People must examine the project, avoid unrealistic promises and beware of influencer promotions.
Cryptography is not a scam, it’s a tool
Crypto, like the Internet, is a neutral technology. Just like email scams, it doesn’t mean that email is bad, and cryptographic scams don’t mean that bitcoin and blockchain are inherently fraudulent.
Scammers always find ways to leverage new technology. The only way to stop them? Education, regulation, and personal responsibility. Cryptography is not an issue. The real problem is the culture of financial shortcuts and the culture of blind trust in quick money schemes.
People must shift their mindset from chasing fast abundance to properly understand digital assets. Because, after all, knowledge is the best defense against fraud.
