It’s no secret that cryptocurrency scams are common, but a warning released today by the Commodity Futures Trading Commission (CFTC) underscores just how serious the issue is. The CFTC has been getting reports of fake cryptocurrency giveaways on social media, including Twitter, Facebook, and Instagram. These scams are sounding very similar to the now-familiar “pump and dump” scams, where fraudsters post fake giveaway announcements to lure their victims into buying into the scam coin. (Here is a real example).
US financial regulator the Securities and Exchange Commission (SEC) has warned that cryptocurrency giveaway scams are on the rise. According to the SEC, scammers are using celebrity names to promote their fake giveaways, which essentially works by the users sending money to the scammers, in the hopes of getting free cryptocurrency. Typical celebrity names used by the scammers include Floyd Mayweather and DJ Khaled. The SEC warns users to be wary of celebrity-endorsed cryptocurrency giveaway scams.
It sounds like a classic get-rich-quick scheme: a promoter approaches you with a claim that you can earn massive amounts of money by using the promoter’s cryptocurrency service. The promoter promises to make you a millionaire by simply sending a bunch of cryptocurrencies to the promoter, who will then send you back even more cryptocurrencies that are worth more than what you sent. What could go wrong? Well, as with all too-good-to-be-true schemes, this cryptocurrency scam is a fraud that can end up costing you thousands of dollars.. Read more about tesla bitcoin giveaway 2020 and let us know what you think. The US Federal Trade Commission (FTC) says reports of cryptocurrency fraud have skyrocketed. People have reported sending over $2 million in cryptocurrencies to impersonators of Elon Musk in the past six months.
Elon Musk con artists and other cryptocurrency scammers
On Monday, the FTC released its review of consumer protection data. FTC analyst Emma Fletcher wrote: Reports to the FTC’s Consumer Sentinel show that scammers are taking advantage of the craze in cryptocurrencies and luring people into fake investments in record numbers. She clarified: Since October 2020, reports of losses from this scam have skyrocketed. Nearly 7,000 people reported losses of more than $80 million. Your average loss? $1,900. Compared to the same period last year, this means an increase of about a factor of 12 in the number of reports and an increase of almost 1000% in the number of reported losses. Fletcher explained that with the rise in prices of cryptocurrencies, scammers are entering the scene with claims that sound plausible because cryptocurrencies are uncharted territory for many people. She said some of these schemes are based on sponsor chains, where existing members receive a commission for attracting new investors to the schemes. Many people report being lured to sites that look like investment or mining opportunities in cryptocurrencies, but are fake. They often offer different levels of investment – the more you invest, the higher the expected return, the analyst explains. Websites use fake valuations and cryptocurrency jargon to make themselves look credible, but promises of huge, guaranteed returns are just lies. These sites may even give the impression that your investment is increasing. But people report that when they try to withdraw their supposed winnings, they are asked to send even more cryptocurrencies – and end up getting nothing in return. The FTC analyst further warned about donation scams, noting that they often pose as sponsors of celebrities or other well-known figures in the cryptocurrency space who promise to immediately multiply the cryptocurrencies you send. However, she adds that people later find out that they just sent their cryptocurrencies directly to the scammer’s wallet. Fletcher continued: People have reported sending Elon Musk’s impersonators more than $2 million in cryptocurrencies in the past six months alone. The analyst noted that scammers will use any story to entice people to send cryptocurrencies, including impersonating a well-known government agency or company. Fletcher additionally explained that many people have told the FTC that they are loading money into bitcoin machines to pay scammers claiming to be from the Social Security Administration. Some have reported losing money to scammers posing as cryptocurrency exchanges like Coinbase. The analyst noted: In fact, cryptocurrencies now account for 14% of losses reported by fraudsters of all types, the report concludes : Promises of guaranteed huge returns or claims that your crypto currency will multiply are always scams. Besides Mr Musk, other well-known celebrities and companies used by the scammers include Richard Branson, Spacex, Tesla, Amazon, Bill Gates, Jeff Bezos and Chamath Palihapitiya. In March, a man told how he had been duped by Elon Musk’s bitcoin gift scam. How about the Elon Musk impersonator’s crypto-currency scam? Let us know your comments in the section below. Photo credit: Shutterstock, Pixabay, Wiki Commons Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of a product, service or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.Regulators are warning consumers about new, fake cryptocurrency giveaways that appear to be a scam. The new scam involves a series of websites that guarantee that anyone who participates will receive a certain amount of cryptocurrency. The giveaway websites appear to be legitimate and have been designed to look like the cryptocurrency giveaway sites of well-known coins. However, in order to claim the coins, users are required to pay a certain amount of money. Regulators advise consumers to be cautious of the fake cryptocurrency giveaway websites and to only deal with reputable sources.. Read more about elon promo site and let us know what you think.
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