Billionaire entrepreneur Elon Musk isn't a stranger to having his name used as a scamming device. The Tesla CEO’s name has been attached to multiple digital scams. The scams are often conducted via email and connected in some way to cryptocurrency.
In May, the FTC reported on the crypto fraud referred to as the “giveaway” scam or the Elon Musk club email scam. This particular scam involved Musk impersonators and caused losses of at least $2 million between October 2020 and May 2021.
Crypto scams to watch out for
Musk has long been a proponent of various cryptocurrencies including Bitcoin and Dogecoin—the crypto coin represented by a Shiba Inu dog. At times, Musk has even called himself the “dogefather” for his devotion to Dogecoin.
Musk brought public attention to Bitcoin when he announced that his electric vehicle company Tesla would start accepting Bitcoin as payment in February 2021. However, he reversed the decision months later and said that Tesla would halt Bitcoin payments due to environmental concerns.
The FTC’s May report discussed over 7,000 consumer-reported scams involving cryptocurrency for the fourth quarter of 2020 and the first quarter of 2021.
The Elon Musk club email scam involves a scammer sending emails that promise a cryptocurrency giveaway. In order to be eligible for the giveaway, the recipients must send a smaller amount of cryptocurrency in exchange for a larger payout. Scammers make promises to “multiply” the investment and instead simply walk away with the money.
According to the FTC, consumers reported approximately $2 million worth of crypto losses in the Elon Musk email scam.
One such consumer, Julie Bushnell, reportedly had been directed to a website resembling BBC News. The article she found claimed that Musk was giving away half of his $1.5 billion in Bitcoin, so she willingly sent Bitcoin before realizing it was going to a scammer’s wallet. according to CNBC.
According to a BBC News report, a man who asked to be called “Sebastian” fell prey to an Elon Musk giveaway scam in March that promised to double one’s Bitcoin holdings. It stated that you could participate by sending 0.1 Bitcoin up to 20 Bitcoin. Although the man thought he had verified Musk’s logo properly, it was fake and he lost out on the 10 Bitcoin he sent to the scammers.
For reference, 10 Bitcoin was worth over 400,000 pounds at that time. Currently, 1 Bitcoin equals over $47,800, which means that the 10 Bitcoin loss would be about $478,000 today.
How to report a scam
The FTC reported about $80 million in total cryptocurrency scam losses from October 2020 through May 2021, including the $2 million specifically from Elon Musk impersonators. The average reported loss was $1,900. The FTC notes that the actual rate of cryptocurrency scams is likely higher since not everyone reports the fraud.
A general rule is to never send cryptocurrency after seeing an email or social media post. Always verify transactions carefully.
If you have fallen victim to or simply have seen an example of an attempted crypto scam, report it to the FTC at reportfraud.ftc.gov. Remember that cryptocurrency scams are particularly dangerous because there aren't any real legal protections with crypto, so it’s nearly impossible to recoup your losses.