Elon Musk impersonators stole more than $ 2 million in crypto scams, regulators say

Elon Musk, the CEO of Tesla.

Christophe Gateau / Image Alliance via Getty Images

According to the Federal Trade Commission, Elon Musk impersonators have stolen at least $ 2 million from investors in cryptocurrency scams in the past six months.

The theft is part of a so-called giveaway scam, in which fraudsters impersonate celebrities or well-known figures in the crypto world. They promise to “multiply” the cryptocurrency sent by investors – but instead to pocket it.

Crypto fraud has increased since October and reached its highest level since the first quarter of 2021, according to data released by the FTC on Monday.

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This timing follows an increase in the price of Bitcoin and other popular digital currencies. Bitcoin was trading at more than $ 59,000 on March 31, a return of 450% from its closing price of $ 10,710 on September 30.

Musk, CEO of Tesla, was a big proponent of cryptocurrencies. In a February SEC filing, Tesla announced that it had purchased $ 1.5 billion worth of Bitcoin. In March, Musk said Tesla would accept Bitcoin for vehicle purchases. (He has since retraced that position for environmental reasons.)

Musk’s SpaceX company recently announced it would accept Dogecoin as full payment for a flight to the moon in the first quarter of next year. He has also called himself a “dogefather”.

Bitcoin’s rise may have attracted new for-profit investors playing into the hands of scammers, especially since crypto is uncharted territory for many investors, according to the FTC.

Nearly 7,000 people reported fake crypto investments from October through March and lost more than $ 80 million in total, according to the FTC.

That is roughly twelve times the number of reports and almost 1,000% more reported losses than in the same period last year, according to the agency.

The actual numbers can be much higher as the data only reflects scams reported by consumers.

The typical person reported a loss of $ 1,900. According to the FTC, young investors (ages 20 to 49) were more than five times more likely to lose money in cryptocurrency fraud cases.

Types of crypto scams

School teacher Julie Bushnell told The Independent that she was a victim of Musk’s “giveaway fraud”. Bushnell navigated to a website that appeared to be a BBC News article claiming Tesla was planning to give away half of its $ 1.5 billion stake in Bitcoin. Bushnell sent $ 12,720 worth of Bitcoin before realizing she’d transferred her crypto straight to a scammer’s wallet.

This isn’t the first time Musk’s name has been exploited by scammers.

In 2020, crypto scammers targeted Twitter and took over high profile accounts on the social networking site, including Musk’s. As CNBC previously reported, the scammers made at least $ 121,000 in Bitcoin from their hacking efforts

Crypto scammers don’t just pose as Musk to scam unsuspecting victims. They also often embody a government agency or a well-known company.

According to the FTC, many have reported loading cash into Bitcoin ATMs to pay for scammers allegedly from the Social Security Agency. Others have lost money to scammers impersonating Coinbase, a well-known cryptocurrency exchange.

Investors have also been lured into fake websites looking for ways to invest in or mine cryptocurrencies, according to the FTC.

They usually offer multiple levels of investment and promise higher returns the more money is invested. Such websites generally use fake testimonials and cryptocurrency jargon to appear credible. They may also give the impression that an investor is making a profit but is getting nothing in the end if they try to withdraw funds.

Many have also fallen victim to a crypto version of a “romance scam”. Such investors are embroiled in long-distance relationships when their new “love” talks about a hot cryptocurrency opportunity they are reacting to, according to the FTC.

– MacKenzie Sigalos from CNBC contributed to this report.

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