Elon Musk impersonators stole more than $2m in cryptocurrency scams

Scammers impersonating Elon Musk have stolen millions of dollars from US consumers in cryptocurrency frauds, as online financial cheats seek to capitalise on public interest in trading highly volatile cryptocurrencies such as bitcoin.

Consumers lost more than $80m to cryptocurrency scams between October 1 and March 31, according to data from the Federal Trade Commission, which on Monday reported a “huge spike” in this type of fraud.

More than $2m of the losses were to people pretending to be Musk, the Tesla co-founder and outspoken cryptocurrency enthusiast.

The value lost to cryptocurrency investment swindles has increased tenfold versus the same period last year, according to the regulator. More than 7,000 scams were reported in the six-month timeframe, 12 times as many as the year before.

Investors lost a median amount of $1,900 to the scams, which usually purported to offer investors tips or “secrets” to help them trade cryptocurrencies, the FTC said.

The regulator cited the “Wild West vibe” surrounding cryptocurrency culture as one reason for the jump in scams, as well as an “element of mystery” that created fertile ground for fraudsters targeting young consumers who wanted to make a quick return.

The FTC report followed a sharp decline drop in the trading price of bitcoin, after Musk last week tweeted that the electric carmaker would no longer accept the cryptocurrency as payment for its vehicles, citing concerns over the environmental impact of “mining” it.

Bitcoin traded at just below $44,000 on Monday, down about $20,000 from the high it hit just a month ago.

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“Promises of enormous, guaranteed returns are simply lies,” the regulator said, adding fraudsters had built sophisticated websites that made it appear as though a consumer’s fictitious cryptocurrency investment was growing in value.

A common scam involved promising that a celebrity associated with cryptocurrencies would multiply a person’s purchase.

Young consumers who started trading financial assets for the first time in record numbers at the start of the pandemic were particularly vulnerable, the FTC found.

Consumers under the age of 30 lost more money to investment scams than any other type of fraud.

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