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The Worst Yet to Come for African Cryptocurrency Exchanges

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Exchanges in the African continent have been relatively unscathed, suffering scant losses amidst the $930 million that’s been stolen from global exchanges so far this year, according to data by U.S. cyber security firm Ciphertrace.

The most notable assault on investor funds in the continent of 1.2 billion people happened around March in South Africa. It wasn’t a cyber attack on an exchange, but rather a scam. Fraudsters at BTC Global, a supposed cryptocurrency investment firm, made off with about one billion rand ($80 million) after 28,000 South Africans succumbed to the false promise of incredibly high, quick returns on their investment, police said.

As thefts have stoked exchanges worldwide, some African platforms have woken up to the need to strengthen their security to safeguard investor funds. This is particularly crucial in a continent where cryptocurrency markets are populated by people who trade with a certain degree of ignorance in many cases, lured by the promise of quick riches. Incidents of fraud or stolen money can smear a market struggling to build confidence in the absence of regulatory oversight.