How Security Layers Will Address Rise in Cryptocurrency Fraud

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Emma Okonji

Disturbed by the global rise in cryptocurrency fraud which has led to loss of several millions in different currencies, including naira, one of the leading exchanges of cryptocurrency in Nigeria, Luno, has said the deployment of additional layers of security would go a long way in addressing the challenge, especially for people that are above 60 years of age who are not always online to monitor their accounts.

According to Luno, the additional security layer would help customers in Nigeria where the market is patronised by thousands of people most of whom trade in ignorance, to create awareness and update security strategies to keep up with new attack trends.

Having introduced an extra layer of security for its customers that are over 60 years of age, Luno is calling on all customers above the age of 60 years to send their identity documents as soon as they open a wallet or account, through Luno.

“This added layer of security will help combat fraudulent and scammer activities that target vulnerable customers, as we will be able to immediately verify their identity,” Luno said in a statement.

Rise in scams is one of the main reasons for investors’ dwindling confidence in cryptocurrencies. This has seen the price of frontline cryptocurrencies like bitcoin, Ethereum underperform in 2018. It is also responsible for increased push for more regulatory oversight on the market from different quarters.

In August, the City of London Police noted that there had been 203 reports of cryptocurrency fraud in the months of June and July. Data from Action Fraud, its national fraud and cybercrime reporting centre disclosed that victims lost £2.1 million, which is an average of £10,096 per person.

Director of Action Fraud, Pauline Smith, in an interview with the Financial Times recently, noted that “opportunistic fraudsters are taking advantage of this market, offering investments in cryptocurrencies and using every trick in the book to defraud unsuspecting victims.”

Also in August, 22 year old Aarni Otava, a millionaire from Finland reportedly lost 5,564.4 bitcoins, after inadvertently sending them to fraudsters in Thailand. The Australian Competition and Consumer Commission (ACCC) also raised scam alerts because of a 12 month high incidence of scams involving cryptocurrencies.

Australia-based bitcoin platform, bitcoin.com.au recently highlighted four of the major cryptocurrency scams of 2018 to include OneCoin, Centratech, Dragon Coin, and NCR Coin. These are fake altcoins that have defrauded unsuspecting customers of their money.