REVIEW OF “AN ASSESSMENT OF CONVICTED CRYPTOCURRENCY FRAUDSTERS” AUTHORED BY KAINA HABILA GARBA, SULEIMAN LAZARUS AND MARK BUTTON

The study offers a groundbreaking analysis of cryptocurrency fraud in Nige ria, focusing on cases prosecuted by the Economic and Financial Crimes Commission (EFCC). Grounded in the Space Transition Theory (STT), it examines the socio-demographic characteristics, operational methods, and global impact of fraudsters, while addressing gaps in the literature concerning Nigerian offenders’ involvement in cryptocurrency crimes.

Introduction

Nigeria has emerged as a hub for various forms of cybercrime, including cryptocurrency fraud, due to its rapid adoption of digital currencies and limited regulatory oversight. With only 36.8% of Nigerians having access to formal banking services, cryptocurrencies have provided an alternative means of financial inclusion. However, this has also created vulnerabilities that fraudsters exploit.
While prior studies have examined other forms of cybercrime, such as advanced fee fraud and online romance scams, this study stands out by focusing on cryptocurrency fraud and the specific demographic of Nigerian offenders. The authors leverage unique access to EFCC case files, providing a rare empirical dataset to examine the methods, platforms, and socio-demographics of convicted fraudsters.

Methods and Materials

This study employed a rigorous and methodologically sound approach to investigate cryptocurrency fraud in Nigeria, focusing on data from the Economic and Financial Crimes Commission (EFCC). The methods and materials used effectively support the research objectives, providing credible insights into an emerging area of cybercrime. Below is a detailed review of the key aspects:

Methodology and Data Collection: The study utilised primary data from individual case files of convicted cryptocurrency fraudsters, prosecuted and sentenced by Nigerian courts between 2021 and June 2023. The researchers accessed case files through the EFCC’s Enugu and Lagos Zonal Commands—two regions with significant jurisdiction over financial crimes, including cryptocurrency fraud. The selection of these commands underscores the research’s focus on regions with substantial case volumes and diverse activities.
Sample selection was limited to 22 convicted individuals, ensuring the relevance of the dataset to the research inquiry. While the sample size is relatively small, it provides a concentrated snapshot of convicted offenders, enhancing the depth of analysis. Additionally, the study follows the methodology of prior research (e.g., Lusthaus et al., 2023; Leukfeldt et al., 2017), leveraging law enforcement data to study criminal activities. This alignment with established research approaches lends credibility to the methodology.

Comparative Analysis: The authors draw parallels with studies by Lusthaus et al. (2023) and Leukfeldt et al. (2017), which similarly utilized primary law enforcement data to analyze cybercrime networks. While Lusthaus et al. focused on UK-based cases, this study offers a Nigeria-specific perspective, adapting methods to local contexts. This comparative approach enhances the situational relevance of the methodology and highlights the adaptability of established frameworks to new domains.

Ethical Considerations: Given the sensitive nature of the data, the study adhered to strict ethical standards. Ethical clearance was obtained from both the EFCC and the researchers’ affiliated university, ensuring compliance with privacy and confidentiality requirements. The approval process, including the issuance of clearance number 1110 by the university, reinforces the study’s legitimacy and adherence to ethical guidelines.

Limitations of the Dataset: The authors acknowledge inherent limitations in the data due to its reliance on law enforcement records. Such datasets are often structured for investigative and prosecutorial purposes, which may introduce gaps or biases. Additionally, the focus on convicted offenders may exclude highly professional fraudsters who evade detection, emphasizing that the findings represent a snapshot rather than a comprehensive overview of cryptocurrency fraud in Nigeria. Despite these limitations, the authors argue that the dataset provides invaluable insights into a relatively understudied area of criminal activity.

Significance of the Sample: The choice to restrict the sample to convicted individuals ensures the reliability of the data, as conviction records are authoritative and verifiable. Each case file includes detailed information on offenders’ typologies, methods, financial gains, motivations, and victim locations, offering a comprehensive understanding of the phenomenon. By focusing on conviction records, the study minimizes speculative elements, enhancing the credibility of its findings.

Data Relevance and Specificity: The study’s timeframe (2021–2023) ensures that the data reflects current patterns and trends in cryptocurrency fraud. The inclusion of two key regional commands strengthens the geographical and jurisdictional representation of the findings. Moreover, by limiting the sample to cryptocurrency fraud cases, the study ensures that the data aligns directly with its research focus.

Strengths of the Approach: Primary Data Source: The use of case files from the EFCC provides direct, authoritative insights into cryptocurrency fraud. The study’s emphasis on convicted offenders within a specific timeframe ensures data relevance and specificity. Aligning the methodology with established studies (e.g., Lusthaus et al., 2023) enhances credibility. The dual ethical clearances demonstrate the researchers’ commitment to high standards of research integrity.

Discussion of Findings

The study provides valuable insights into the methods, demographics, motivations, financial gains, global reach, and platforms used by individuals involved in cryptocurrency fraud. Its findings paint a comprehensive picture of how such crimes are executed, who the perpetrators are, and the tools and platforms they utilise.

Demographics of Fraudsters : The findings reveal a homogenous profile of convicted cryptocurrency fraudsters: all were male, with nearly two-thirds under 30 years of age. Only a quarter of the participants possessed a degree, highlighting a lack of higher education among offenders. This demographic composition aligns with existing research on cybercriminal behavior in Nigeria, suggesting that youth with limited educational opportunities may resort to fraud as a means of financial gain.

Methods and Platforms: The study uncovers the diverse methods employed by fraudsters, emphasizing the creativity and adaptability of these offenders. Fraudsters used various schemes, including cryptocurrency investment fraud, romance fraud, and email hacking. They created fake websites, impersonated legitimate actors, and leveraged social media platforms to lure victims.
The most frequently used platform was Facebook, employed by 27% of participants, likely due to its wide reach and ability to foster trust through false profiles. Gmail followed closely, with 22% of participants using it to establish communication with victims. Instagram (14%) and WhatsApp (9%) were also popular, illustrating the importance of visual and direct messaging features in building trust with potential victims. Additionally, niche platforms such as Basetools.tk, Swapfinder, and Google Voice were employed, demonstrating the broad array of tools fraudsters exploit. However, 16% of participants did not disclose their methods, underlining the challenges of obtaining complete data on fraudulent operations.

Financial Gains: The financial gains from cryptocurrency fraud varied widely, ranging from small sums like $1,000 to more substantial amounts, such as $475,000 and even 1,200 BTC. This variation reflects the diverse scale of frauds, from minor scams to highly lucrative schemes. Notably, 73% of participants cited financial gain as their primary motivation, while 27% did not disclose their reasons for engaging in fraud.

Global Reach and Victims: The study highlights the international scope of cryptocurrency fraud, with 55% of fraudsters targeting victims in the United States. Other victims were located in China, Canada, Malaysia, and the Philippines, demonstrating the global reach of these scams. However, 27% of participants did not identify the location of their victims, further illustrating the difficulties of collecting precise data on such crimes.

Preferred Cryptocurrencies and Platforms: Bitcoin emerged as the most commonly used cryptocurrency, preferred by 46% of participants. Its decentralized ledger and inherent anonymity made it particularly attractive to fraudsters. Other platforms like Binance, Paxful, Luno, and Localbtc.com were also utilized but to a lesser extent. The study clarifies that fraudsters often conflated the broader concept of blockchain technology with specific cryptocurrencies like Bitcoin, reflecting a misunderstanding or oversimplification in their terminology.

Key Takeaways: The findings underscore the intersection of technological advancements and criminal behavior, revealing the vulnerabilities within digital currency ecosystems. The study’s detailed exploration of platforms, communication methods, and financial motivations provides a nuanced understanding of cryptocurrency fraud. Moreover, it highlights the challenges in gathering comprehensive data, such as incomplete disclosures from offenders or ambiguity in their statements.
This research contributes significantly to the discourse on cybercrime by emphasising the need for robust monitoring and regulatory measures. It calls for heightened scrutiny of cryptocurrency transactions and platforms to mitigate fraudulent activities and protect potential victims.

Conclusion

This study provides critical insights into cryptocurrency fraud in Nigeria, underpinned by a robust methodological framework. By analysing EFCC case files, the authors offer a rare glimpse into the socio-demographic and operational characteristics of convicted fraudsters.
The findings underscore the need for stricter regulation and international cooperation to combat the transnational nature of these crimes. Moreover, the study highlights how anonymity and decentralisation in cryptocurrency ecosystems create opportunities for fraud, necessitating a balance between innovation and consumer protection.
This work is a significant contribution to cybercrime literature and offers valuable recommendations for policymakers, law enforcement, and researchers aiming to address the growing challenge of cryptocurrency fraud.

The lead author of the study, Kaina Habila Garba of the Economic and Financial Crimes Commission, EFCC, can be reached via kainagarba@gmail.com

Suleiman Lazarus, London school of Economics and Political science (LSE)

Mark Button, University of Portsmouth