Point of view: essential crypto tips for South African consumers

Cryptocurrency has changed the way we think about money, but for many South Africans, it’s still an unfamiliar and confusing space. It’s digital, fast-moving, and full of both opportunities and risks. And while crypto offers exciting ways to invest and make transactions, it also comes with scams, speculation, and serious pitfalls.

As a personal finance editor, I’ve seen stories of people who invested in Bitcoin or Ethereum at the wrong time, lost thousands to scam platforms, or blindly followed advice from influencers promising instant wealth.

I even experienced it myself. A few years ago, I was approached by someone claiming they had a guaranteed investment strategy that would double my money in a month. I hesitated, after all, the numbers looked convincing, and the platform was filled with “success stories” of investors who had allegedly made millions. But something felt off. After checking the provider's credentials, I discovered it wasn’t licensed by the Financial Sector Conduct Authority (FSCA). Just weeks later, the platform disappeared, taking countless investments with it.

That moment solidified my belief: knowledge is your best weapon in the world of crypto.

Crypto assets are essentially digital money, stored and traded electronically using a blockchain, an online record that keeps transactions secure and cannot be easily changed. The two most well-known crypto assets are:

• Bitcoin – Often called “digital gold”, Bitcoin is primarily used as an investment tool, much like a digital savings account.
• Ethereum – While Ethereum can also be used as money, it has added capabilities such as digital contracts and decentralised applications.

While both have strong potential, they also come with intense volatility. Prices can skyrocket and crash within days, meaning there’s as much risk as there is reward.

Crypto fraud is nothing new, but as the FSCA officially recognised crypto as a financial product in 2022, scams have evolved to target both beginners and experienced investors.

South Africa has seen an alarming increase in crypto-related fraud. A study by Kaspersky found that over half of users in the country have been affected by crypto scams, while only 24% felt well-informed about cryptocurrency risks.

Scammers know how to play on emotions, promising fast money with low effort. That’s why recognising red flags is critical.

Here are five warning signs that the FSCA says consumers must watch for:

1. Fake Websites – Scammers create platforms that mimic legitimate crypto exchanges, tricking users into handing over their money.
2. Too-Good-to-Be-True Returns – If an investment guarantees huge profits, it’s most likely a scam.
3. Requests for Additional Deposits – Legitimate platforms don’t ask for extra money before allowing withdrawals.
4. “No Experience Needed” Claims – Any service telling you that trading requires no knowledge should be avoided.
5. Celebrity Endorsements – Scammers often use fake endorsements to make their schemes seem credible.

To combat fraud, the FSCA introduced licensing for Crypto Asset Service Providers (CASPs) in 2023.

This means South Africans can now check if a provider is legitimate before investing. If a platform isn’t licensed, avoid it completely.

If you suspect a crypto scam, contact the Financial Advisory and Intermediary Services (FAIS) Ombudsman.

• Website: FAIS Ombudsman Complaints Portal
• Email: info@faisombud.co.za
• Client Care Centre: (012) 762 5000 or Sharecall 086 066 3274

For further consumer protection, you can also reach the FSCA Consumer Help Centre at 0800 20 3722.

Crypto is an exciting new space, but it’s also one where bad actors thrive. The best way to protect your wealth is to educate yourself, use regulated service providers, and never invest blindly.

As I learned through my close call with a scam, if something feels too good to be true, it probably is.

* Maleke is the editor of Personal Finance.

PERSONAL FINANCE