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Scammers impersonating Elon Musk have stolen millions of dollars from American consumers in cryptocurrency scams while online financial scammers seek to capitalize on the public interest in trading highly volatile cryptocurrencies like bitcoin.
Consumers lost more than $ 80 million in cryptocurrency scams between October 1 and March 31, according to new data from the Federal Trade Commission, which on Monday reported a “huge rise” in ‘this type of fraud.
The scammers who supplanted the cryptocurrency enthusiast audience and Tesla co-founder Musk were responsible for more than $ 2 million in losses.
According to the regulator, the value lost by investment scams in cryptocurrencies has multiplied by ten over the same period last year. More than 7,000 scams were reported within six months, twelve times more than the previous year.
Investors lost an average of $ 1,900 from the scams, which were typically intended to offer investors tips or “secrets” to help them trade electronic currencies, the FTC said.
The regulator cited the “vibration of the wild west” surrounding cryptocurrency culture as one of the reasons for the scam jump, as well as an “element of mystery” that created fertile ground for scammers targeting young consumers who they wanted to get a quick return.
The FTC report followed a sharp drop in the commercial price of bitcoin, after Musk, last week, tweeted that the electric vehicle maker would no longer accept cryptocurrency as payment for its vehicles, al · bequeathing concerns about the environmental impact of cryptocurrency “mining”.
Bitcoin traded just below $ 44,000 on Monday, about $ 20,000 from a record high just a month ago.
“The promises of huge, guaranteed returns are simply lies,” the regulator said, adding that the scammers had created sophisticated websites that made it appear as if the fictitious investment in consumer cryptocurrency was growing in value.
A common scam involved promising that a celebrity associated with cryptocurrencies would multiply a person’s purchase.
Young consumers who first began trading financial assets in record numbers at the start of the pandemic were particularly vulnerable to scams, the FTC found.
Consumers under the age of 30 lost more money to swindle investments than any other type of fraud.
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