Elon Musk impersonators have stolen more than $2 million through crypto scams, FTC says
- Scammers impersonating Elon Musk have stolen more than $2 million in the past six months alone, according to the FTC.
- The number of scams has risen as many attempt to cash in on the cryptocurrency buzz this year.
- The agency said people in the age group 20 to 49 were five times more likely to report losing money to fraud.
Crypto scammers impersonating Elon Musk have stolen more than $2 million in the past six months alone, according to the Federal Trade Commission. The activity comes amid exploding interest in crypto investing.
The FTC said the fraudulent schemes have many forms, and so-called giveaway scams are among the most common. They're false setups supposedly sponsored by celebrities who promise to multiply or match the amount of cryptocurrency sent. Under such a scam, people send cryptocurrency directly into the scammers' wallets.
It may not come as a surprise that the Tesla chief is among the figures being impersonated the most given his vocal opinions as a cryptocurrency enthusiast, which also seem to have market-moving effects.
Musk, one of the prominent figures in the cryptocurrency space, has, several times in the past, moved the price of dogecoin, GameStop, and Etsy, among others.
Most recently, bitcoin has been the asset caught in the middle of the billionaire's tweeting spree. Over the weekend, Musk - the self-proclaimed Dogefather - sent the price of the cryptocurrency plunging after he seemed to have suggested that his electric vehicle company had sold its holdings, and then clarifying that Tesla, in fact, did not.
Since October 2020, nearly 7,000 people have reported losses of more than $80 million on these scams at a median loss of $1,900 - 12 times the number of reports and nearly 1,000% more in reported losses compared to the same period last year.
Another type of ploy, which topped the list as the most lucrative way to obtain cryptocurrencies, is the "investing" scam, FTC said. This typically involves impersonating a government authority or a well-known business.
"Sites use fake testimonials and cryptocurrency jargon to appear credible, but promises of enormous, guaranteed returns are simply lies," the agency said. "But people report that, when they try to withdraw supposed profits, they are told to send even more crypto - and end up getting nothing back."
Many told the FTC that they fed cash into bitcoin ATMs to pay fraudsters claiming to be from the Social Security Administration. Coinbase Global, a cryptocurrency exchange, is another commonly referred to business by scammers.
As for the demographic profile of those being people targetted, the agency said people in the age group 20 to 49 were five times more likely to report losing money to scams compared to older age groups.
People 50 and older were far less likely to report losing money, but on an individual basis, reported losses at an average of $3,250.
"Cryptocurrency enthusiasts congregate online to chat about their shared passion," the agency said. "And with bitcoin's value soaring in recent months, new investors may be eager to get in on the action."
Cryptocurrencies have skyrocketed in 2021, hitting a $2 trillion market valuation in April, just three months after it breached the $1 trillion mark. The rally is led by bitcoin, which has grown 51% year-to-date, ether at 354%, and dogecoin at around 10,300%.