More Bad Press for Cryptocurrencies in Africa, and More Need for Cybersecurity

Egyptian authorities have arrested 29 people, including 13 foreign citizens, accused of running an online cryptocurrency scam that defrauded thousands of investors. The network pocketed about $620,000 at the expense of victims in the country now battered by an economic crisis and rapid inflation. The online platform “HoggPool”, which appeared last August according to local media. The scheme promised large profits from cryptocurrency mining and trading services, for fees charged at an attractive foreign exchange rate. It is illegal to deal in cryptocurrency in Egypt –  punishable by prison and a fine of up to $325,000. According to media reports, HoggPool abruptly ceased operations in February and vanished with the money. Authorities said the network was planning to launch a new platform called “Riot” when they were arrested.

As readers of this Newsletter know,  lack of security infrastructure represents one of the biggest challenges facing the continent as governments and businesses continue to make enormous strides in bringing African digitisation into the mainstream of globalisation. One of the biggest threats is financial losses. Cyber-attacks can result in significant financial losses for SMEs. The cost of remediation, data recovery, and damage repair can be substantial. In addition, a cyber-attack can lead to a loss of business, revenue, and customers, which can be devastating for small businesses. Cyber attacks can also seriously disrupt an SME’s operations, sometimes beyond repair. If a business’s critical systems are compromised or inaccessible, this can lead to delays, missed deadlines, and lost productivity. SMEs that suffer a cyber-attack may also face legal and regulatory consequences. Depending on the nature of the attack and the data that was compromised, SMEs may be required to notify customers or regulators, pay fines or penalties, or face legal action from customers or business partners. Finally, cyber-attacks can result in the loss of critical business data. This can include financial records, customer data, and intellectual property. Losing this data can have long-term consequences for an SME’s competitiveness and ability to function.