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Opinion: Crypto scams use celebrity imposters, other money stealing tricks

By on May 30, 2021 0

Mix two trending names – cryptocurrency and Elon Musk – and you’ve got a recipe for scamming people.

In the past six months, consumers have reported losing more than US $ 2 million (RM 8 million) in cryptocurrency to Elon Musk imitators, according to a May report from the Federal Trade Commission.

Admit it, Las Vegas wouldn’t be Vegas without Elvis impersonators. And scams often aren’t the same without masquerading as a celebrity, like Tesla CEO Elon Musk.

As the Bitcoin buzz grew, crooks suspended bogus investments, sometimes pretending to be someone else and deceiving consumers in record numbers.

How crypto crooks tried to steal $ 50,000 (RM206.675) from Michigan woman

Some victims, according to the FTC, also said they lost money to scammers posing as Coinbase, a well-known cryptocurrency exchange.

A resident of Troy, Michigan, told police in March, for example, that he was contacted by a so-called cryptocurrency website that wanted them to send money to be converted into cryptocurrency . The victim gave the site a copy of his driver’s license but not his banking information, according to the police report.

Chase Bank later contacted her regarding a possible fraud on her account where tens of thousands of dollars were suddenly transferred from savings to verification.

One day, US $ 4,000 (RM16,534) went from savings to checks.

The next day, the crooks transferred approximately US $ 77,000 (RM 318,279) from savings to checks. And then that same day, crooks attempted to make 50 wire transfers of US $ 1,000 (RM 4,133) – trying to get a total of US $ 50,000 (RM 206,675). The bank has stopped all wire transfers and changed account numbers.

Consumers, however, should be aware that crooks have access to all kinds of information that already exists and have worked hard to hack into accounts.

A con artist, for example, could have cobbled together information about Troy’s victim from data breaches, social media, or shopping on the dark web and then targeted her for additional information such as a driver’s license. Passwords can be stolen during data breaches and if you use the same password everywhere, crooks have easier access to a variety of accounts.

Criminals work fast, according to banking industry experts, with 40% of fraudulent activity associated with hacking a bank account in one day. It is recommended that you contact a bank immediately when you think you might be a target.

Almost 7,000 people across the country said they have lost over 80 million US dollars (330 million RM) on all manner of cryptocurrency investment scams since October. They reported a median loss of US $ 1,900 (RM 7,853) based on FTC data.

The FTC noted that reported dollar losses increased nearly 1,000% from the same period a year earlier.

How do you spot a Bitcoin scam?

Some victims have ended up being tempted by so-called ‘gift scams’ where a celebrity, like Musk, promises to offer you more cash or digital currency to send them cryptocurrency.

Some have reportedly seen YouTube videos highlighting an alleged cryptocurrency ‘gift’ from Musk.

Later, of course, you learn that you just converted your money and sent bitcoin or other cryptocurrency to a scammer.

“Digital currency is being used more and more as a payment mechanism because it is even more difficult to stop and trace than gift cards,” warned Jon Miller Steiger, director of the Central East region of the FTC. The regional office, based in Cleveland, serves Ohio, Michigan, Pennsylvania, Virginia, West Virginia, Maryland, Delaware and Washington, DC

“We strongly advise people to avoid paying anything with cryptocurrency or wire transfer, and only use gift cards to purchase the gifts they were intended for,” he said.

Have you really started dating a Bitcoin broker?

Unsurprisingly, people tend to talk about where they work or what they do when they meet on a dating app or elsewhere.

But recently, some people are developing an online love interest that pretends to be an investment professional or somehow explains how to make big bucks investing in a new, and ultimately bogus, transaction. cryptocurrency.

Romance con artist turns crypto crook.

Amy Nofziger, director of victim support for the AARP Fraud Watch Network, said a consumer complained after meeting someone on the Zoosk dating app who told them he was making a lot of money. money by investing in bitcoins. When he suggested that she invest too, she protected his savings by telling him that she didn’t want to discuss money with him.

Investment scams, of course, are growing as more people hear about what appears to be a new way to make big money in cryptocurrency.

“There’s a lot of crypto in the news right now – and as we always say, scammers follow the headlines,” Nofziger said.

An Indianapolis woman told the AARP Fraud Watch Network that she lost $ 1,100 (RM 4,546) after a woman at her church assured her that she could make 10 times her initial investment by converting from l money in cryptocurrency.

There are no investment guarantees, of course. Nofziger also said it’s entirely possible the church lady didn’t even pitch the pitch. A scammer could have hacked the woman’s Facebook account to appear more legitimate and promote the bogus investment, she said.

Many millennials who laugh at their parents or more senior coworkers saying they would never fall in love with anything so stupid indeed lose real money to cryptocurrency scams.

Scams may seem unlikely, but scammers know how to convince people that they need to take action.

Scammers don’t care about demographics. And often, younger consumers are more likely to fall victim to cryptocurrency scams because they are eager to make money and are frequently on social media where certain scams are launched.

As of October 2020, people aged 20 to 49 are more than five times more likely to report losing money in cryptocurrency investment scams than older groups, according to the FTC.

Watch out for big empty promises

As with any pitch, potential investors need to take shelter if suddenly someone promises exceptional returns, like earning 10 times the amount you originally invested.

Is anyone trying to sell you unregistered titles? Or do they provide misleading information about the risks or the transaction itself?

Seemingly sophisticated speech prompted a Michigan investor to stake US $ 100,000 (RM413,350) in some sort of cryptocurrency mining strategy. The investor expected to earn 2% per week.

But Michigan regulators ultimately issued a cease-and-desist order last year for Mintage Mining and BC Holdings and Investments and, as part of a settlement, the entities agreed to pay civil fines and not conduct any business in Michigan governed by the Securities Act. (Respondents neither admitted nor denied the claims that there was an investment of US $ 100,000 / RM413,350 with an expected weekly return of 2%.)

Some of these offers can work as Ponzi scams where you get a good payout initially, but this part of the scam is only designed to get you to attract more friends and family.

A man from Midland, Michigan contacted LinkedIn a few years ago to contact a former colleague who lived in Montana about a must-see cryptocurrency deal.

The man claimed to work for CoinPoint, an internet advertising company that pushes people to the websites of participating companies, and that CoinPoint is looking for investors, according to the Montana District Attorney’s Office.

The first victim sent around US $ 7,000 (RM28,934) to James Matthew Thomas, 35, who ended up pleading guilty in October 2019 to wire fraud and money laundering.

A few days later, Thomas sent the victim US $ 9,203 (RM38,040) in virtual currency, representing a return on investment of around 30%.

Based on the return, the first victim spoke with a second victim and some of his friends and family. The second victim invested $ 185,000 (RM 764,697) with Thomas and friends and family agreed to contribute an additional $ 500,000 (RM 2 million).

Much of the money collected from friends and family was never converted into virtual currency or transferred to Thomas.

As the scam progressed, Thomas told Victim 1 that the investments were doing well and he was getting rich. Victim 1 requested to be included in communications with CoinPoint and started receiving emails from various alleged CoinPoint employees, “according to the Justice Department.

But the FBI later determined that the email addresses were fake and associated with another domain name – – that was not associated with the real CoinPoint. Investigators also determined that Thomas registered the fake domain name,, the day after Victim 1 requested to be included in the communications.

Bitcoin turns into the new Best Buy gift card for scammers

As crooks keep asking for gift cards – perhaps calling them ‘e-vouchers’ – experts say cryptocurrency is another way for crooks to have easy access to money and stay anonymous.

Nofziger said scammers often go online to find an ATM that offers bitcoin that happens to be closest to your house. Then they could direct you to that place.

Many times you may need to go to a nearby grocery store or gas station to find an ATM that offers bitcoin. The scammer might even give this ATM a name and never mention Bitcoin.

Many people have told the FTC that they have loaded money into Bitcoin ATMs to pay impostors claiming to be from the Social Security Administration, for example.

Connecting with celebrities, Nofziger said, seems to be increasingly popular. Lately, she says, crooks have been posing as wrestlers and country stars. Or they can pretend to be someone from the PR team of one of these stars.

Sometimes people are tricked into thinking that they can help a celebrity’s charitable cause, like building schools in another country, by sending cryptocurrency.

Because they trust the star, they trust the cause.

In one case, she said, a woman lost $ 25,000 (RM 103,337) when she converted money into cryptocurrency after an impostor pretending to be a celebrity needed the money for better security management. – Detroit Free Press / Tribune