Online Fraud and Cryptocurrency in Tanzania: Legal Issues Surrounding Cyber Scams

Abstract

Over the past decade, Tanzania has experienced significant digital transformation driven by increased internet access, mobile technology, and digital financial services. This growth has created fertile ground for innovations like blockchain and cryptocurrencies. Popular digital currencies such as Bitcoin and Ethereum are now used locally for investment, remittances, and transactions, promoting financial inclusion and modernisation. However, these benefits are accompanied by rising risks, particularly online fraud. Criminal activities such as Ponzi schemes, phishing scams, fraudulent Initial Coin Offerings (ICOs), and ransomware attacks have increased, exploiting limited public awareness and weak institutional oversight. Tanzanian law enforcement and regulatory bodies often lack the technical expertise and jurisdictional reach to respond effectively, leaving victims vulnerable and eroding trust in digital finance. This paper examines the legal and regulatory challenges posed by cryptocurrency-related fraud in Tanzania. It analyses key domestic laws, including the Cybercrimes Act 2015, Electronic Transactions Act 2015, and Anti-Money Laundering Act 2006. While these laws address cybercrime broadly, they lack specific provisions related to cryptocurrencies, such as clear definitions, asset tracing mechanisms, and cross-border cooperation tools. Drawing on Tanzanian case studies, legal literature, and international examples from countries like the UK and Japan, the study identifies legal gaps and highlights successful regulatory strategies abroad, including crypto exchange licensing, Know Your Customer (KYC) rules, and public education campaigns. The paper concludes by recommending comprehensive reforms to strengthen Tanzania’s legal framework, enhance regulatory oversight, promote public awareness, and develop cross-border enforcement strategies to protect the integrity of the country’s digital financial ecosystem.