Crypto adoption in Africa is growing at a faster rate than ever. From Nigeria to Kenya and South Africa, millions of people are turning to digital assets for payments, savings, and investments.

In Nigeria alone, around US $59 billion in cryptocurrency was processed between mid-2023 and mid-2024. This signifies a huge potential for expansion, but also puts your crypto exchange squarely in the sights of bad actors.

Fake exchanges, stolen identities, and money mule networks are continuously creating gaps in crypto verification and transaction monitoring. As a crypto exchange lead, your focus is no longer just on growth; it’s on keeping your users safe.

To do this, you need reliable fraud prevention strategies that detect risky activity before it escalates. No exchange is completely immune to these fraud risks, but knowing the right steps to take can help you protect your users and safeguard your crypto platform.

On that note, here are seven proven ways to detect and prevent fraud on your crypto exchange in Africa.

1. Understand the Most Common Crypto Fraud Types

The first step in detecting fraud is knowing what to look for. As a founder, compliance lead, or product manager, you need to understand how fraud can appear on your crypto platform. Once you recognize these patterns, you can design stronger systems to detect and block them early.

Common fraud patterns to watch for:

• Phishing and Account Takeovers: Fraudsters trick users into revealing wallet keys or login details through fake websites or Telegram messages, then hijack accounts to steal or move funds.
• Fake Token Listings and Rug Pulls: Scammers launch fake tokens, promote them and disappear once users invest. These are especially common in African markets where new coins draw quick attention.
• Transaction Laundering: Criminals move funds through multiple wallets or exchanges to hide their source—for example, stolen crypto might pass through wallets in Nigeria and Ghana before being cashed out.
• Wash Trading: The same entity buys and sells a token repeatedly to inflate its price or trading volume, misleading others into thinking it’s in high demand.
• Money Mule Networks: Fraudsters move funds across regions at the same time. A mule in Kenya might receive stolen funds and send them to another wallet in South Africa to hide the trail.
• Social Engineering and Impersonation: Scammers pose as exchange admins, founders, or influencers to trick users into sending funds or revealing personal information.

By understanding the various fraud patterns, you can establish a solid foundation for crypto compliance and more effective fraud detection as your platform expands.

2. Strengthen KYC and Identity Verification

Before users trade on your platform, you must be confident about who they are. Weak or surface-level KYC gives fraudsters room to open multiple fake accounts using stolen or synthetic identities. A strong first line of defense starts with a layered KYC process that combines document checks, biometrics, and data validation.

Here’s how to strengthen your KYC process:

• Verify government-issued IDs: Utilize local databases, such as NIN or BVN in Nigeria, and Huduma Namba in Kenya.
• Add biometric verification: Use facial or fingerprint checks to confirm the person behind the ID is genuine.
• Cross-check data consistency: Match names, birth dates, and ID numbers across all documents.
• Screen against watchlists: Run sanctions and PEP (Politically Exposed Persons) checks to flag high-risk users.
• Use liveness detection: Prevent spoofing or deepfake attempts during verification.
• Enable ongoing verification: Re-verify users periodically, especially for high-value transactions.

You can use easy-to-integrate KYC tools to simplify identity verification on your crypto exchange. ZendWallet, a crypto platform in Nigeria, used Dojah’s EasyOnboard to simplify its KYC process and onboard users without friction. 

See: How KYC in Crypto works in Africa

             Ready to improve KYC accuracy on your exchange? Book a quick demo 

3. Implement Know Your Transaction (KYT) Monitoring

The next step in preventing fraud is based on how you track and understand money movement on your crypto platform. While KYC helps you identify users, KYT focuses on their activity. For crypto exchanges in Africa, where cross-border and P2P transfers are common, KYT helps detect suspicious wallet behavior before it leads to major fraud.

Here’s how you can implement KYT effectively:

• Set clear transaction thresholds: Flag and review transfers that exceed normal user patterns or involve multiple wallets.
• Integrate blockchain analytics tools: Use KYT solutions that map wallet addresses linked to known scams or darknet activity.
• Automate real-time alerts: Build automated rules to flag unusual activity (e.g., rapid deposits and withdrawals within minutes).
• Correlate user and transaction data: Combine KYC and KYT insights to spot users who move funds in ways inconsistent with their profile.
• Review flagged cases regularly: Create a feedback loop between compliance and product teams to refine risk detection.

You can use transaction monitoring tools like EasyDetect to run KYT effectively and track wallet activity in real-time.

Related: KYT for Crypto exchanges in Africa: A complete guide

4. Use Real-Time Fraud Detection Tools

After setting up reliable KYC and KYT systems on your crypto exchange, the next step is catching fraud as it happens. Real-time fraud detection helps you identify unusual wallet activity or trading behavior before losses occur.

For instance, a sudden surge in trading volume for a new token may look genuine, but real-time monitoring can reveal coordinated wallet activity and stop potential scams.

Here’s how your crypto exchange can approach it:

• Implement risk scoring: Assign risk levels to transactions and users based on history, geography, and trading patterns.
• Detect anomalous activity: Spot trading spikes, repeated small transfers, or sudden cross-account movements.
• Analyze patterns: Connect related wallets to uncover coordinated manipulation attempts.
• Automate alerts: Ensure your compliance team receives instant notifications for high-risk activity.
• Review and refine: Regularly update detection rules based on evolving fraud tactics.

See how EasyDetect tracks crypto transactions in real time and flags high-risk wallets before they spread. Request a demo

See: How Crypto transaction monitoring works in real-time

5. Conduct Regular AML Audits and Risk Reviews

Fraudsters constantly adapt, and outdated compliance rules can leave your crypto exchange vulnerable. Conducting regular audits of your AML and KYT systems ensures you catch gaps before they become costly problems. Think of it as checking your defenses and updating them based on how fraud patterns evolve.

Here’s how to make it practical:

• Schedule periodic system reviews: Evaluate KYT and AML workflows at set intervals to identify weak points.
• Update rule engines: Adjust detection thresholds, risk scoring, and anomaly alerts based on new fraud trends.
• Analyze flagged cases: Review patterns in past suspicious transactions to refine your monitoring rules.
• Benchmark against regulations: Ensure processes meet local and international standards like CBN, FATF, and SEC.
• Document improvements: Keep logs of updates and audits to demonstrate compliance to partners or regulators.

As a user of EasyDetect, you can track crypto AML performance through its analytics dashboard, which helps you visualize suspicious activity trends and stay one step ahead of evolving fraud risks.

Also see: AML transaction monitoring software for crypto in Africa

6. Educate Users and Internal Teams

Preventing fraud isn’t just about systems or tools; it starts with people. Your team and platform users play a vital role in detecting unusual activity, so they need to understand how fraud works and how to respond. A well-informed community builds a culture of vigilance that strengthens your crypto exchange’s defenses.

Here’s how to put it into action:

• Run user awareness campaigns: Teach customers how to recognize scams, phishing attempts, and suspicious wallet activity.
• Train internal teams: Hold regular crypto AML and fraud prevention sessions for compliance and product teams.
• Share real-world examples: Use regional case studies to make learning practical and relatable.
• Encourage reporting: Make it easy for staff and users to report suspicious activity or potential fraud.
• Continuous learning: Update training materials as fraud tactics evolve.

You can reinforce these efforts with resources from Dojah’s blog and resource centre, where your team can access guides and learning materials to stay proactive against crypto fraud.

Prevent Crypto Fraud in Africa with Dojah

As crypto adoption continues to grow across Africa, exchanges have the potential to scale faster than ever. But without strong fraud prevention and identity verification, that growth can easily be derailed. The steps in this guide help you strengthen your defenses in a fast-changing market.

Trusted by over 500 businesses and having verified more than 50 million identities, Dojah is built for crypto platforms looking to scale and grow securely across Africa.

Our product suite, including EasyDetect and EasyOnboard, gives your crypto exchange the accuracy, speed, and regional coverage needed to operate securely across Africa.

It’s simple to integrate into your existing systems and is supported by a reliable team that helps you prevent fraud at scale.

Book a demo today to see how Dojah can safeguard your crypto platform

Frequently Asked Questions on  Preventing Crypto Fraud in Africa

1. What are the most common crypto frauds in Africa?
Phishing, fake token listings, rug pulls, transaction laundering, wash trading, and money mule networks exploit weak KYC and transaction monitoring.

2. How can African crypto exchanges detect and prevent fraud?
Implement strong KYC, real-time KYT monitoring, risk scoring, automated alerts, and educate staff and users to spot suspicious activity early.

3. What KYT tools help monitor suspicious transactions?
Tools like Dojah’s EasyDetect flag unusual wallet activity, cross-wallet patterns, and high-risk behavior in real time, helping prevent fraud and support AML compliance.

4. How does Dojah’s EasyOnboard support crypto platforms?
EasyOnboard streamlines KYC and identity verification using government IDs, biometrics, and sanctions checks, enabling a secure onboarding process.

5. How can exchanges protect users from phishing and scams?
Run awareness campaigns, share real-world examples, and encourage users to report suspicious messages or transactions.

6. Why is continuous monitoring important for African crypto exchanges?
Fraud tactics evolve quickly. Ongoing monitoring ensures suspicious activity is detected early, helping your exchange stay compliant and secure