New data from Luno, SA's crypto-currency platform, reveals that while crypto-related scams affect less than 1% of its 14 million customers, scams and fraudulent misrepresentation remain the most prevalent forms of fraud in digital currency.
A recent case involving a South African man who lost R4 million to a scammer has highlighted the growing threat of crypto-currency scams in the country. According to Luno, the victim was scammed over a period of four and a half years, with the scammer posing as a person in need of help.
The company has handled 516 scam-related customer queries over the past three months, says Christo de Wit, country manager for South Africa at Luno.
Luno says South African males aged 20-40 are most susceptible to crypto scams, followed by women aged 20-30, and then females aged 55 and above. Victims of fraud are more likely to pursue high-risk investments in the hope of quick returns, making them vulnerable to scammers who promise unusually high returns.
"When you look at the numbers in the context of 14 million customers, it is very few cases. The value of losses varies... but for affected customers, it can be a massive personal loss," says De Wit.
Luno has identified several types of scams, including phishing and impersonation of staff, financial advisors promising guaranteed returns, and technical confusion where customers attempt to send coins to incompatible wallets or networks. In some cases, customers are used as money laundering mules, where money is deposited into their personal bank account and then transferred to their crypto-currency wallet.
“When transacting online, ensure you have taken security measures, such as not using the same password across multiple financial platforms and devices. Never use the same password on more than one account, and implement additional security measures such as two-factor authentication and passkeys. Scammers are smart, don’t give hackers access to your e-mail and passwords,” advises De Wit.
Luno maintains co-operative relationships with regulatory, financial and law enforcement authorities, including the Financial Intelligence Centre, the Financial Sector Conduct Authority and the South African Reserve Bank. The company says it responds to all official inquiries and subpoenas related to criminal investigations.
Customer education remains one of the most effective defences against sophisticated scammers, and Luno is working to enhance crypto-currency literacy among South Africans.
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