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Elon Musk impersonators steal millions from vulnerable bitcoin fans
Elon Musk is joining the inflation debate by blaming raw material prices for Tesla price hikes. File photo: AFP.

(ATF) Scammers impersonating Tesla cofounder Elon Musk have stolen millions of dollars from American consumers in cryptocurrency frauds, a US regulator reported on Monday.

Consumers lost more than $80 million to cryptocurrency scams between October 1 and March 31, according to the US Federal Trade Commission, which has reported a “huge spike” in this type of fraud.

In a new consumer protection data spotlight, the FTC broke down the contents of nearly 7,000 reports received from consumers about these scams in the last quarter of 2020 and the first quarter of 2021.

The median amount consumers reported losing to the scams was $1,900 but more than $2 million of the losses were to people pretending to be Musk.

The value lost to cryptocurrency investment swindles has increased tenfold versus the same period last year, according to the regulator.

More than 7,000 scams were reported in the six-month timeframe, 12 times as many as the year before.

INVESTMENT ‘TIPS’

Investors lost a median amount of $1,900 to the scams, which usually purported to offer investors tips or “secrets” to help them trade cryptocurrencies, the FTC said.

The spotlight notes that cryptocurrency investment scams take on a variety of forms, sometimes starting as offers of investment “tips” or “secrets” in online message boards that lead people to bogus investment websites.

Another common form of the scam involves a promise that a celebrity – such as Musk – associated with cryptocurrency will multiply any cryptocurrency you send to their wallet and send it back.

The FTC report followed a sharp decline drop in the trading price of bitcoin, after Musk last week tweeted that the electric carmaker would no longer accept the cryptocurrency as payment for its vehicles, citing concerns over the environmental impact of “mining” it.

Bitcoin traded at just above $44,000 on Monday, down about $20,000 from the high it hit just a month ago and a dip of 4% over the previous 24 hours.

“Promises of enormous, guaranteed returns are simply lies,” the FTC warned.

YOUNGER VICTIMS

The regulator said consumers aged from 20 to 49 were over five times more likely than older age groups to report losing money to a cryptocurrency investment scam.

In the six-month period covered by the spotlight, consumers in their 20s and 30s lost more money to investment scams than any other form of fraud.

More than half of their investment scam losses were in cryptocurrency.

The FTC has more information for consumers about cryptocurrency investment scams, and how to avoid them, at ftc.gov/cryptocurrency.

Separately, Musk lost his spot as the world’s second-richest person to LVMH chairman Bernard Arnault as the electric vehicle-maker’s shares fell 2.2%, according to Bloomberg data.

Musk, who held the top spot in the Bloomberg Billionaires Index as recently as March, now has a fortune of $160.6 billion, down 24% from its January high.

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Elon Musk needs to learn Jack Ma lessons in China

Musk drags down bitcoin after Tesla shares dip on results

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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