- Most illegal activities hinge on the functionality of cryptocurrency. Various crypto coins have entirely given user control over their personal information, known as private crypto coins
- The countries with the highest prevalence of crypto ownership are Thailand, Nigeria, the Phillippines, South Africa and Turkey
- Taking countries such as Nigeria, several self-made millionaires, such as Gaius Chibuezze, are considered the Bitcoin Chief. His fame inspired millions of young Nigerians who aspire to reach the heights Gaius has reached.
2022 has been one of the most impactful and crucial moments in cryptocurrency. The crypto ecosystem has gone through ups and downs and sometimes both. Multiple franchises have partnered with crypto-based organizations to incorporate blockchain in their systems. This has been a blessing in disguise as the new crypto winter is slowly settling in, and crypto value is dropping slowly.
Despite its increased acceptance rate, the more available crypto becomes to crypto traders and miners, the riskier it becomes towards cryptocurrency. This crypto risk analysis asks whether the increased acceptance of cryptocurrency leads to the rise of new crypto criminals.
Cryptocurrency is built on the core concept of avoiding a centrally located system; however, doing so has led to others exploiting it. Ultimately we need to ask ourselves if the acceptable rate of crypto is truly benefiting Africa and the world. Alternatively, it will usher in a new wave of crypto criminals.
Crypto risk Analysis: The rise to glory
With South Africa finally announcing a new crypto regulation framework, the crypto ecosystem in Africa is at an all-time high. Tanzania has also expressed its interest in cryptocurrency and blockchain technology with the backing of its newly elected president.
Cryptocurrency, or Bitcoin in more specific terms, has consistently grown. Since 1997 Bitcoin has increased at an annual rate of 113%, beating the entire Internet’s growth rate of 63%. Even if it slowed down the crypto ecosystem, it would still have a significant lead over most of the technological advancements in this era.
Also, Read the 2022 bear market, a haven for Africa’s crypto market opportunities.
The countries with the highest prevalence of crypto ownership are Thailand, Nigeria, the Phillippines, South Africa and Turkey. Each holds a significant chunk of the crypto pie. Africa might have the most considerable crypto adoption rate, but on a global scale, the rate of crypto acceptance is staggeringly high, and traditional financial institutions are feeling it.
In the US, more than 75% of US business owners spend more than $100 of crypto for purchases monthly, with a significant amount spending more than $ 1000. Even without factoring in the crypto risk analysis, the crypto ecosystem is still growing. The Internet might not fully integrate Web3 yet, but blockchain technology birthed from it has taken the tech world by a wave. Some are now considered millionaires, all from crypto.
Taking countries such as Nigeria, several self-made millionaires, such as Gaius Chibuezze, are considered the Bitcoin Chief. His fame inspired millions of young Nigerians who aspire to reach the heights Gaius has reached. Hence, through commitment and development, Nigerian citizens have decided to conquer the financial instability of the target.
Crypto Criminals take advantage
After focusing on the positive end of the crypto risks analysis, various facts have significantly contributed to its roadblocks. The key concept behind crypto trading and blockchain technology is to ensure the availability of these products. The centralized nature of most systems solely relies on a single entity in terms of pay and project continuation.
Most illegal activities hinge on the functionality of cryptocurrency. Various crypto coins have entirely given user control over their personal information, known as private crypto coins. With private coins, crypto criminals can transact their currencies without worry due to their untraceable nature.
Another factor that crypto has that draws the attention of crypto criminals is its unmatched speed and access. Traditional financial systems were slow, and it would take days for any actual processing to e accomplished. Due to this fact, most criminals opted to use hard cash to o their deeds, but now crypto offers a new solution.
Crypto trading and blockchain technology require an internet connection and a wallet application. These are items that anyone can easily download on any device. The transfer of funds occurs in minutes, and there is no way to reverse the transactions once miners confirm them.
A simple click would allow crypto criminals the means to fund their operations and give them a platform to exploit. Let’s consider the Twitter crypto hack, where the hackers gained access to high-profile accounts such as Joe Biden’s, Barack Obama, Bill Gates and others. In doing so, they promoted fake crypto projects that thousands bought, and when authorities realized what was going on, victims sent more than $100000 worth of Bitcoin to the linked account. The transaction was not only fast but also irreversible.
The final and most crucial factor in this crypto risk analysis is the borderless nature of crypto. Crypto criminals are unlike traditional criminal groups, where most of their members would have a primary base of operation. Due to technological advancements, crypto criminals can be diverse or hailing from different continents, working harmoniously on multiple illegal activities.
Likewise, the crypto ecosystem is borderless; various transactions can occur despite geographical location. A crime of a hack could be happening in servers located in Russia, yet the attacker is in Kenya or Nigeria. Crypto money laundering and security fraud demonstrate the ease of global transfers enabled by crypto trading and the lack of trust between parties that have little information about each other apart from the sole purpose of the transaction.
Is acceptance fueling Illegal activities
In various crypto risk analyses, many experts claim that the very nature of technology is neither good nor bad; it just depends on who is using it. With the increased integration of blockchain technology in Africa and the globe, advancements and innovation will soon arrive in waves.
As more and more economies recognize crypto as a financial product, this gives much leeway for crypto criminals. In the same way, Web2 revolutionized the 1990s; hackers still found a way to bypass the systems and conduct illegal activities. Cyber security is a tug-of-war between security analysts and hackers. Unfortunately, the bitter truth is that as the crypto ecosystem continues to grow, so will crypto criminals.
However, they will still be able to dominate the network. Instead, blockchain technology has various security mechanisms dedicated to monitoring and tracking any suspicious activities within Web3. In addition, setting strict crypto regulations will help protect crypto trading within a country.
By setting clear rules on cryptocurrency and blockchain technology applications, we can limit the effectiveness of crypto criminals. In Australia, crypto exchanges must register with AUSTRAC in compliance with anti-money laundering and counter-terror financing obligations. South Africa and Nigeria have also set various crypto regulation frameworks that govern crypto usage.
The possibility of crypto criminals increasing is high. We can identify the critical areas to improve blockchain security through other crypto risk analyses.