When Cryptocurrency Investments Really Are Too Good To Be True
The US Federal Trade Commission (FTC) reports that victims have lost more than $80 million in cryptocurrency scams since October of last year, with about $2 million of that total going to Elon Musk impersonators.
Scammers are taking advantage of misunderstandings that often surround cryptocurrency investments, and they use a variety of techniques. Impersonating celebrities like Musk is just one; there are also fake investment sites that you can’t actually withdraw your “investment” from, giveaways that claim to multiply your cryptocurrency, and even classic online dating scams that attempt to con would-be romantic partners into crypto investment scams.
“In fact, the FTC’s new data spotlight shows that, since October 2020, nearly 7,000 people reported losses to bogus cryptocurrency investments, adding up to more than $80 million,” the FTC says. “People ages 20-49 were more than five times more likely than other age groups to report losing money on those scams. But here’s an even more striking point: people in their 20s and 30s have lost more money on investment scams than on any other type of fraud. And more than half of their reported investment scam losses — $35 million — were in cryptocurrency.”
The FTC offers the following advice for people to avoid falling for these scams:
- “Research before you invest. Search online for the company and cryptocurrency name, plus ‘review,’ ‘scam,’ or ‘complaint.’
- “Be wary of guarantees and big promises. Scammers often promise you’ll make money quickly, or that you’ll get big payouts or guaranteed returns. They might offer you free money paid in cash or cryptocurrency — but, even if there’s a celebrity endorsement, don’t buy it. You’ll make money if you’re lucky enough to sell your crypto for more than you paid. Don’t trust people who say they know a better way.
- “Anyone who says you have to pay by cryptocurrency, wire transfer, or gift card is a scammer. If you pay, there’s usually no way to get your money back.”