Saturday, December 3, 2022
  • South Africa ranks eighth worldwide in crypto ownership
  • 7% of its total population have crypto investments from different exchange platforms, with 43% of the holders aged between 18-34
  • Tiamo(alias name), aged 15, also decided to embark on a cryptocurrency journey. His fresh new mind and zeal for crypto investments caught the eyes of several crypto scams
  • In June 2022, a US regulator filed several charges against a South African man for soliciting bitcoin from thousands of people as part of a crypto scam worth $1.7 billion

Everyone in this day and age dreams and desires to live a lavish lifestyle. Desiring and fulfilling such dreams are, however, two different things. Most crypto startups take advantage of Africa’s crypto ecosystem is a relatively new venture.

Some crypto investments made a turn out for the better, but they generally involve putting in work. Many individuals have decided to exploit this growing thirst for crypto trading and lure young and unknowing minds into investing in fraudulent schemes or fruitless blockchain projects.

South African teens have recently fallen for such traps and unknowingly dived into crypto scams.

Unexpecting South African Teens

In South Africa, a young mind discovered advertisements about the power of crypto investments and blockchain projects. Lured in by the promise of fame and fortune, John(alias name) decided to embark on his crypto journey.

At the age of 14 years, John decided to join the African ecosystem by downloading a legacy trading app and bypassing its regular checkpoints by lying about his age.

south african teens try crypto investments and end up banking in false crypto startups. is this the future of africa's crypto ecosystem? web3africa.newsafrican teen try crypto investments and end up banking in false crypto startups. is this the future of africa's crypto ecosystem? web3africa.news

South African teens fall prey to crypto scams hoping to acquire a better life.[Photo/Africa24]

Also, Read about African Artists using NFTs to promote their culture to the world.

 As the crypto investments began producing small profits, John was thrilled and hooked on the blockchain project. Unfortunately, John short-lived the celebrations as 2022 ushered in an immense wave of volatility within Africa’s crypto ecosystem. This forced John to borrow money from his parents to cover the losses he experienced.

According to John, he believes these crypto investments will eventually pay back with interest. Because of his vast knowledge of crypto startups, the South African teen began conducting classes for anyone interested in African cryptocurrency. His designer T-shirts and jeans attracted many of his ‘students’. This emulated his desire to dress like the influencers who inspired him to join crypto.

As a result of his dedication, he has struggled with keeping up with schoolwork. This has directly affected his grades and has his parents worried—a student who once had straight As is struggling to keep awake in class.

Why do crypto scams thrive in SA

South Africa is one of the leading countries in Africa’s crypto ecosystem. According to the United Nations trade Agency, South Africa ranks eighth worldwide in crypto ownership. 7% of its total population have crypto investments from different exchange platforms, with 43% of the holders aged between 18-34.

Various crypto startups have originated from the country, some of which have compelling success stories. Crypto scams have taken advantage of this increased adoption rate within South Africa and lured unknowing South African teens. It deceives them into thinking crypto is an easy way to make money.

They have taken advantage of crypto’s anonymity and provided a haven for criminal activities. Crypto scams can be conducted in various ways, even by SA teens.

A crypto startup, Africrypt, suddenly vanished in 2021 after informing its users that a third party hacked their blockchain security, compromising their accounts. Afterwards, the crypto startup disappeared, taking $3.6 billion, one of the most significant crypto losses worldwide.

In June 2022, a US regulator filed several charges against a South African man for soliciting bitcoin from thousands of people as part of a crypto scam worth $1.7 billion. These crypto scams have affected South Africa as a nation. As a result, it has blinded youths to believe that all those with crypto investments are guaranteed to earn a substantial profit.

The rate of crypto scams within Africa’s crypto ecosystem has rapidly increased. To contain this growth, South African police have warned its citizens from instigating or participating in such activities.

Also, Read How to spot the difference between crypto investments and scams.

Spreading awareness about crypto scams among South African teens.

The core reason Africa’s crypto ecosystem has a slow growth rate is the lack of cryptocurrency information. In another case, Tiamo(alias name), aged 15, also decided to embark on a cryptocurrency journey. His fresh new mind and zeal for crypto investments caught the eye of several crypto scams. Recently the most common one involves receiving a text on Whatsapp claiming to know how to make significant money in a matter of days. 

Tiamo genuinely thought this was an excellent opportunity to earn enough to help his mother, but unfortunately, he lost more money. This, in turn, ended up stressing the family even more.

Creating awareness of how crypto works within Africa is crucial to reducing such scams. Crypto exchange platforms such as Binance have taken this upon themselves to provide free education on cryptocurrency, what it is and how it works.

To curb crypto scams from preying on young minds, we must educate them on the dos and don’ts of crypto. Some genuine crypto investments are sure to generate profits, but nothing is achievable overnight. Other African crypto startups such as Yellow Card and Chipper Cash have also opted to establish an Academy to expand Africa’s crypto ecosystem.

South Africa, a leading country in crypto investments, is at the forefront of many cryptocurrency companies such as Ethereum and Bitcoin; educating SA teens is a sure way of increasing their market.

Closing Remarks

These life stories and struggles show us that crypto is like any other venture. It involves ingenuity as well as hard work. Knowing which crypto to invest in requires thorough research and constant observation of the crypto market. SA teens should be taught this right before embarking on crypto investments. It helps to discern between a genuine crypto startup from a crypto scam.

Read: Common cryptocurrency scams to look out for in 2022

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