New data from the Federal Trade Commission (FTC) has shown nearly 7,000 consumers losing more than $80 million to cryptocurrency investment scams, with Elon Musk impersonators tricking unsuspecting victims.
According to the FTC's report, people have reported losing over $2 million to scammers impersonating the Tesla CEO since last October. This is largely due to the recent surge in Dogecoin, which has been backed by Musk himself. However, scam artists have been known to impersonate other celebrities associated with other cryptocurrencies.
As spotted by The Verge, the FTC report states scammers posing as celebrities would promise those interested in cryptocurrency investments they could easily multiply any amount of cryptocurrency consumers send to their wallet, and send it straight back. Unfortunately, they don't do the latter.
With cryptocurrencies such as Bitcoin and SafeMoon being the recent buzzwords on the web, data shows that people between the ages of 20 and 49 were more than five times more likely than any other age group to lose money on these scams.
Going even further, those in their 20s and 30s lost more money to investment scams too, with up to $35 million because of cryptocurrency alone. Yikes.
Over the past six months, users affected by the scam have reportedly lost an average of $1,900. That's a hefty sum for anyone trying to join the cryptocurrency hype.
How to avoid cryptocurrency scams
While it's always a good idea to do background checks before offering any information, especially when it comes to financial information, scammers still find a way to trick unsuspecting victims.
As the FTC points out, one major red flag is anyone asking you to pay by using cryptocurrency, wire transfer, or gift card. While big companies such as PayPal via Coinbase and Mastercard are starting to accept cryptocurrency as a form of payment, anyone else trying to use this method is a scammer.
A common scam tactic is to offer consumers a way to make money faster or to multiply their cash through a "secret" method. There isn't any. It's best to do your own research for the best way to make extra cash through cryptocurrency. Head over to the FTC's support page for more tips on how to avoid getting tricked.
If you are interested in investing, check out the best cryptocurrencies by utility, and the best places to buy them.