In December 2024, the Economic and Financial Crimes Commission (EFCC) arrested over 800 individuals connected to cryptocurrency trading scams. Between July 2023 and June 2024, the country received approximately $59 billion in cryptocurrency, reflecting the population’s strong engagement with digital assets.
However, the prevalence of scams has tarnished the reputation of cryptocurrencies in Nigeria.
If cryptocurrency disappeared today, fraudulent activities wouldn’t stop. The real issue isn’t crypto, it’s the get-rich-quick mentality that scammers exploit. From Ponzi schemes to fake investments, people around the world have long been targeted by fraudsters promising unrealistic returns. Now, with the rise of digital assets, scammers have simply found a new playground.
Crypto gets the blame instead of the deeper issues—economic hardship, lack of financial education, and regulatory loopholes. But is crypto truly the villain or just a tool being misused? The TRM Labs 2025 Crypto Crime Report shows that illicit transactions have dropped by 51%, but scammers are evolving with AI-powered fraud, deepfake phishing, and cross-chain laundering.
Why People Keep Falling for Crypto Scams
1. Economic Desperation
Rising inflation, limited job opportunities, and currency instability push many people to seek alternative ways to make money. Crypto presents opportunities, but in 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 work. Scammers take advantage of this ignorance, promising guaranteed returns, fake trading bots, or non-existent tokens. A common red flag? Investment schemes that promise fixed daily or weekly returns—something real crypto investments do not offer.
3. Influencers and Celebrity Endorsements
Fraudsters leverage popular figures, paying influencers to promote Ponzi schemes disguised as crypto opportunities. By the time the fraud collapses, the promoters disappear, leaving investors with nothing.
4. AI-Powered Scams & Financial Grooming
According to TRM Labs, scammers are increasingly using AI-generated deepfakes, phishing messages, and fake identities to appear more convincing. Financial grooming scams, commonly called “pig butchering,” are growing—scammers build trust over time before draining victims’ wallets.
Fraud is not new to the digital age. Long before cryptocurrencies, we had:
Bank fraud – Fake forex investment schemes.
Real estate scams – Developers selling lands they don’t own.
Ponzi schemes – where returns to earlier investors are paid out using the capital of newer investors, rather than from any legitimate profit earned. This unsustainable model eventually collapses when it becomes impossible to recruit enough new investors to pay returns to earlier participants.
Read also: Mastering crypto volatility: Turning market cycles into long-term opportunities
Today’s crypto scams exhibit features of traditional fraudulent schemes above. However crypto scams move fast, and once funds are lost, recovering them is difficult. However, blockchain makes crypto more traceable than cash, enabling law enforcement to track transactions—if they have the right tools.”
The Real Role of Blockchain in Stopping Scams
1. Crypto is Traceable
Unlike cash-based scams where money disappears, blockchain transactions are recorded permanently. TRM Labs reports that illicit transactions dropped by 51%, thanks to improved tracking.
2. Regulated Exchanges Have Security Measures
Platforms with proper KYC (Know Your Customer) verification make it harder for scammers to operate. Users should always use reputable exchanges instead of random P2P transactions.
3. Blockchain Forensic Tools Are Getting Better
Governments worldwide are recovering stolen crypto using forensic blockchain analysis. The challenge? Many authorities lack expertise and resources to track stolen digital assets effectively.
4. New Tactics Are Making Crime Harder to Detect
TRM Labs notes that sanctioned entities and criminals are shifting from mixers to cross-chain bridges, making it harder to track illicit funds.
What Needs to Change?
1. More Blockchain Education
People need to understand how crypto really works—not just how to buy or sell, but how to spot scams. Crypto literacy should be as important as financial literacy.
2. Better Regulation Without Stifling Innovation
Instead of banning crypto, countries need stronger penalties for scammers, consumer protection laws, and clearer industry guidelines.
3. Personal Responsibility
The golden rule of investing applies here: If it sounds too good to be true, it probably is. People must verify projects, avoid unrealistic promises, and be cautious of influencer promotions.
Crypto is a Tool, Not a Scam
Crypto, like the internet, is a neutral technology. The same way email fraud doesn’t mean email is bad, crypto scams don’t mean bitcoin and blockchain are inherently fraudulent.
Scammers will always find a way to exploit new technology. The only way to stop them? Education, regulation, and personal responsibility. Crypto isn’t the problem—the real issue is a culture of financial shortcuts and blind trust in quick-money schemes.
People must shift their mindset from chasing quick riches to understanding digital assets properly. Because in the end, knowledge is the best defense against fraud.
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