Elon Musk Impersonators Scam People Out of $2 Million in Crypto – Here’s How to Keep Your Money Safe

Mandatory Credit: Photo by ALEXANDER BECHER/EPA-EFE/Shutterstock (10764495w)Tesla and SpaceX CEO Elon Musk gives a statement at the construction site of the Tesla Giga Factory in Gruenheide near Berlin, Germany, 03 September 2020.
ALEXANDER BECHER/EPA-EFE/Shutterstock / ALEXANDER BECHER/EPA-EFE/Shutterstock

People have reported sending more than $2 million in cryptocurrency to Elon Musk impersonators over just the past six months, the Federal Trade Commission said in a statement yesterday.

See: This Man Lost $14,000 in an Investment Scam
Find: How Does Cryptocurrency Work – and Is It Safe? 

The so-called “giveaway scams,” supposedly sponsored by celebrities or other known figures in the cryptocurrency space, promise to immediately multiply the cryptocurrency you send. But, people report that they discovered later that they’d simply sent their crypto directly to a scammer’s wallet, the FTC said.

Ron Geffner, partner at financial services law firm Sadis & Goldberg, tells GOBankingRates that to avoid these scams, one needs “a healthy dose of skepticism, with a sprinkler of mistrust.” He adds that “the three magic words in the investment community are verify, verify and verify. Check multiple sources to confirm the accuracy of information.”

The FTC reports that since October 2020, reports of crypto scams have skyrocketed, with nearly 7,000 people reporting losses of more than $80 million with a median loss of $1,900. This compares to 12 times the number of reports and 1,000% more in reported losses to the same period a year earlier.

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In terms of age groups, people ages 20 to 49 were five times more likely to report losing money on cryptocurrency investment scams than older age groups, which flies in the face of typical thinking about who is susceptible to being conned online.

See: The Classic Cons Behind These Digital-Age Scams
Find: 15 Coronavirus Scams To Avoid at All Costs

“Some say there’s a Wild West vibe to the crypto culture, and an element of mystery too. Cryptocurrency enthusiasts congregate online to chat about their shared passion,” the FTC says in the statement, “And with bitcoin’s value soaring in recent months, new action. All of this plays right into the hands of scammers. They blend into the scene with claims that can seem plausible because cryptocurrency is unknown territory for many people. Online, people may appear to be friendly and willing to share their ‘tips.’ But that can also be part of the ruse to get people to invest in their scheme. In fact, some of these schemes are based on referral chains, and work by bringing in people who then recruit new ‘investors.'”

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Other ways scammers operate include impersonating a government authority or a well-known business, the FTC warns. For example, many people have told the FTC they loaded cash into Bitcoin ATMs to pay imposters claiming to be from the Social Security Administration. Others reported losing money to scammers posing as Coinbase, the largest crypto exchange.

See: Coinbase, the Largest US Cryptocurrency Exchange, Goes Public – ‘It Will Infect the Financial Universe with a Bad Case of FOMO’
Find: Elon Musk Sends Doge Prices on a Rollercoaster After Tesla Drops Bitcoin

The FTC notes ways to be safe and to avoid being scammed it comes to cryptocurrency:

  • Promises of guaranteed huge returns or claims that your cryptocurrency will be multiplied are always scams.
  • The cryptocurrency itself is the investment. You make money if you’re lucky enough to sell it for more than you paid. Period. Don’t trust people who say they know a better way.
  • If a caller, love interest, organization, or anyone else insists on cryptocurrency, you can bet it’s a scam.
  • If you spot a scam, report it to the FTC at ReportFraud.ftc.gov.

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About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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