The offer was enticing: investors who would be ready to provide a cryptocurrency infusion to Elon Musk, the wealthy CEO of Tesla and founder of SpaceX, for a money-making enterprise would be rewarded handsomely. It appeared to be too wonderful to be true, and it was. The Federal Trade Commission (FTC) stated in a study released on Monday that investors lost $2 million in six months to scammers impersonating Mr. Musk. The report was aimed to draw attention to a rise in cryptocurrency scams.
From October to March, the commission discovered that over 7,000 people lost a total of US$80 million as a result of numerous schemes targeting investors in Bitcoin and other cryptocurrencies including Dogecoin, a shadowy currency that Mr. Musk has aggressively pushed on Twitter. According to the commission, the median amount they lost was $1,900. The increase in fraud cases compared to the same period last year was approximately 1,000 percent, according to the research, as the price of Bitcoin and Dogecoin rocketed to new highs.
The commission’s report stated, “All of this plays straight into the hands of scammers.” “Because bitcoin is unfamiliar ground for many individuals, they blend into the scene with assertions that can appear convincing.” In an email on Tuesday, a commission representative said they had received 133 complaints from people who claimed to have been misled by the impersonators. According to the representative, they had seen films on YouTube with text flowing across the screen alerting them to a claimed “giveaway” from Mr. Musk.
Some others told the commission that they responded to tweets they mistook for Mr. Musk’s. According to the spokeswoman, the giveaway offers offered to instantly quadruple Bitcoin deposits submitted to Mr. Musk. On Monday night, representatives for Mr. Musk at Tesla did not immediately respond to a message requesting comment. Tesla announced in its annual report in February that it had purchased US$1.5 billion worth of Bitcoin as part of an initiative to invest in alternative assets such as digital currencies and gold bullion.
The news, combined with Mr. Musk’s March statement that Tesla will accept Bitcoin as payment for cars in the United States, drove Bitcoin’s price soaring by more than 10%. But, earlier this month, Mr. Musk switched course, stating that the company would no longer take Bitcoin due to
environmental concerns. Mr. Musk has also delivered contradictory messages on Dogecoin, a cryptocurrency spoof that was founded in 2013 and has recently exploded in popularity.
Last Monday, he asked his 55.1 million Twitter followers if Tesla should take Dogecoin, and 78 percent of them replied yes. He also disclosed last week that in exchange for a payment in Dogecoin, SpaceX would send a spacecraft to the Moon next year. Mr. Musk argued that bitcoin was both “the future of currency” and “a hustle” in a May 8 appearance on Saturday Night Live.
