July 2, 2022
  • July 2, 2022

Elon Musk imposters scammed $ 2 million in cryptocurrency, US says

By on May 18, 2021 0

The proposal was enticing: Big returns awaited investors who would be willing to provide a cryptocurrency infusion to Elon Musk, Tesla’s billionaire CEO and founder of SpaceX, for a lucrative business.

It sounded too good to be true – because it was.

Investors lost $ 2 million in six months to fraudsters posing as Mr. Musk, the Federal Trade Commission said in a report published Monday which aimed to draw attention to a spike in cryptocurrency scams.

The commission found that nearly 7,000 people lost a total of $ 80 million from October to March in various scams targeting investors in Bitcoin and other cryptocurrencies like Dogecoin, a nebulous market Mr. Musk said. promoted bullishly on Twitter. The median amount they lost was $ 1,900, according to the commission.

The spate of fraud cases – an increase of almost 1,000% from the same period a year earlier, according to the report – came as the price of Bitcoin and Dogecoin hit record highs.

“All this is playing the game of crooks,” says the commission report. “They blend into the scene with claims that may seem plausible because cryptocurrency is unfamiliar territory for many people.”

It was not immediately clear how many people had been duped by the impersonators or if they had received solicitations for the money. It was also not clear if they had used a particular cryptocurrency platform.

The committee did not immediately respond to a request for further information on Monday evening.

Representatives for Mr. Musk at Tesla also did not immediately respond to a message seeking comment on Monday evening.

The electric car maker revealed in its February annual report that it bought $ 1.5 billion worth of Bitcoin, which Tesla said was part of an initiative to invest in alternative assets such as digital currencies and gold bars.

The revelation, along with Mr. Musk’s announcement in March that Tesla would accept Bitcoin as a payment method for cars in the United States, pushed the price of Bitcoin up by more than 10%. But then Mr Musk turned the tide this month, saying the company would no longer accept the cryptocurrency due to concerns about its impact on the environment.

Mr Musk has also sent mixed messages regarding Dogecoin, which was created as a cryptocurrency parody in 2013 and has recently seen a huge boom.

Last week, he probed its 55.1 million Twitter followers on whether Tesla should accept Dogecoin; 78 percent of respondents said yes. He also revealed last week that SpaceX will launch a satellite to the moon next year in exchange for payment in Dogecoin. During a May 8 appearance on “Saturday Night Live,” Mr. Musk said cryptocurrency was both “the future of money” and “a commotion”.

Joseph A. Grundfest, professor of law and business at Stanford and former member of the Securities and Exchange Commission, said in an interview Monday night that the surge in scams involving cryptocurrency was not at all surprising in the midst of soaring prices.

He said investors should be more wary of proposals like those cooked up by Mr. Musk’s imitators.

“Do not send cryptocurrency to Elon Musk,” Mr. Grundfest said. “He already has more than he needs.”

The Federal Trade Commission warned in the report Monday that fraudsters have used online dating platforms to lure people into cryptocurrency scams. About 20% of the money people have said they have lost through romance schemes since October has been sent in cryptocurrency, according to the report.

The committee also noted that people aged 20 to 49 were more than five times more likely than older people to report losing money to cryptocurrency investment scams.

Cryptocurrency experts have warned that it is particularly difficult for victims of fraud schemes to get their money back and that cryptocurrency has become a preferred payment method for orchestrating ransomware attacks.

“In practice, there is no recourse,” said Mr. Grundfest. “Why crypto? It is very simple. It is very difficult to trace.