Ethiopia Fights Cybercrime Straight from the Crypto Dark Web – Quartz Africa
In June this year, Ethiopia’s central bank issued a statement saying that crypto business in the country is illegal. Less than three months later, the country appears to have reversed that decision, instead requiring cryptocurrency operators to register with the national cyber security agency – the Information Network Security Administration (INSA) – within 10 days.
This move by the government to recognize the industry is driven by a desire to be proactive in protecting citizens from crypto-related cybercrime.
“There is interest among individuals and entities to provide crypto services including mining and transfer,” INSA said, warning that crypto players who fail to register will be prosecuted even as the global crypto winter continues. On August 28, Bitcoin plunged below $20,000 for the first time since July 14.
In June, INSA said it thwarted 97% of cyber attacks attempted on various institutions in the country since July 2021, helping the country save $26.3 million.
While African countries recognize the growing threat of cyber insecurity on the continent, none have set measures to curb cyber attacks hidden in online crypto marketplaces. Ethiopia wants to lead on this front.
And although a laggard in the adoption of crypto in Africa, Ethiopia is quickly catching up with dominant players such as Nigeria, Kenya, South Africa and Egypt. With 1.8 million Bitcoin traders, Ethiopia ranks seventh in Africa in terms of crypto holding capacity.
Crypto challenges in Africa
Despite growing interest, crypto trading is still banned by most African governments except the Central African Republic. In May, Uganda carried out a nationwide crackdown on payment providers that facilitate crypto transactions, after 5,000 victims lost approximately $2.7 million through Ponzi schemes.
There have been stories of pain in Ethiopia’s southern neighbor Kenya when traders were burned in May. However, Ethiopian crypto traders continue to explore the business, and nine crypto exchanges have sold them digital coins.
“Although it is claimed that the blockchain is a more secure way of transacting, the downside of course is that if you lose your private key, there is no way to get your money back,” Iwa Salami, an expert on fintech regulation told The Conversation.
Billions of dollars are lost via crypto-cyber attacks
The latest Chainalysis report indicates that losses from cryptocurrency fraud rose 60% in the first seven months of this year to $1.9 billion, driven by an increase in funds stolen from decentralized finance (DeFi) protocols.
Once seen as impenetrable by hackers and ransomware groups, cryptocurrency platforms have become the target of cyber attacks as they are the preferred payment method for all types of fraud, proceeds of theft and fraudulent transactions. The FBI’s Internet Crime Report shows that the criminal use of cryptocurrency is among the three most reported cybercrime incidents in the world.
