The Federal Trade Commission (FTC) of the United States says that accounts of cryptocurrency scams have increased dramatically. Over the last six months, people have reported sending more than $2 million in cryptocurrency to Elon Musk impersonators.
The Federal Trade Commission published “Consumer Protection Data Spotlight” on Monday. “Reports to the FTC’s Consumer Sentinel say scammers are cashing in on the hype surrounding cryptocurrencies and luring people into fake investment opportunities in record numbers,” FTC analyst Emma Fletcher wrote. She went on to say:
Since October 2020, the number of reports has risen dramatically, with approximately 7,000 individuals claiming losses totaling more than $80 million. Their estimated loss was $1,900 on average. In comparison to the same time last year, there were almost twelve times as many cases and nearly 1000℅ more confirmed losses.
As the popularity of cryptocurrencies increased, scammers “blend into the scene with arguments that may seem plausible since cryptocurrency is unfamiliar territory for many people,” according to Fletcher. Some of these schemes, she explained, are focused on referral chains, in which current participants are charged a referral fee for bringing in new investors.
“Many people have reported being duped into visiting websites that appear to provide opportunities to invest in or mine cryptocurrencies but are scams. They also offer several investment tiers, with the higher the investment, the higher the ostensible return,” the analyst explained. “To look credible, scam websites use fake testimonials and cryptocurrency jargon, but claims of huge, assured returns are simply lies. These websites can also give the impression that your investment is growing. However, when people attempt to withdraw alleged profits, they are told to send even more crypto – and then receive nothing.”
The FTC analyst then issued a warning about “giveaway scams,” which frequently tend to be “funded by celebrities or other well-known personalities in the cryptocurrency space and pledge to instantly multiply the cryptocurrency you sent.” “People say that they later discovered that they’d sent their crypto directly to a scammer’s wallet,” she said. Fletcher went on to say:
Over the last six months, people reported having sent Elon Musk impersonators over $2 million in cryptocurrency.
“Scammers will use whatever story works to get people to send crypto,” according to the analyst, which includes “impersonating a government authority or a well-known business.”
Furthermore, “many people have told the FTC they loaded cash into bitcoin ATMs to pay imposters pretending to be from the Social Security Administration,” according to Fletcher. Scammers posing as cryptocurrency exchanges, such as Coinbase, have been accused of stealing money from some people. “In reality, 14% of all recorded losses to impersonators of all types are now in cryptocurrency,” the analyst concluded:
Guaranteed massive returns or claims that your cryptocurrency will be multiplied are always scams.
Richard Branson, Spacex, Tesla, Amazon, Bill Gates, Jeff Bezos, and Chamath Palihapitiya are among the celebrities and companies used by scammers in relation to Musk. In March, one man revealed how he became a victim of an Elon Musk bitcoin giveaway scam.