Has “Elon Musk” asked you to send him bitcoins, offering to double your money? Did you get an official-looking solicitation from the Texas firm “Peters Wealth Management” to buy cryptocurrency? How about someone on a dating app touting a “great new investment?”
All of these are scams involving the latest buzz-worthy investment—cryptocurrency. While legitimate currencies such as Bitcoin can offer good, if often volatile, returns, scam artists are proficient at separating unwise investors from their money.
State attorneys general and regulatory agencies are cracking down. Attorneys general in Massachusetts and New York have issued fines and cease and desist orders to stop bogus crypto companies from bilking customers. The Federal Trade Commission has collected thousands of complaints about scams like the fake Musk affair. And some states are considering or have enacted new laws to try to regulate the cryptocurrency market.
The FTC reported in May that consumers sent more than $2 million to impersonators pretending to be Tesla boss Elon Musk over the previous six months. From October 2020 to May, nearly 7,000 people reported losses of more than $80 million on that and other fake crypto schemes, with a median loss of $1,900, according to the FTC.
In a preliminary report from the third quarter of this year, the FTC found that people lost $200.8 million from fraudulent cryptocurrency payments, second only to the $202.1 million victims lost from…