There are many cryptocurrency scams on the internet. According to the Federal Trade Commission, it is a growing business with more than $80,000,000 in losses reported by US consumers between October 2020 - May 2021. This represents a tenfold increase in year-over-year.
Scams are now commonplace. Scammers are replacing websites that teach users how to avoid being scammed in crypto-world.
These schemes are not new to Tesla CEO Elon Musk. Numerous scammers have targeted Musk's Twitter mentions with cryptocurrency scams promising huge returns on small investments.
A man from the UK lost half a million dollars in Bitcoin to a Musk-themed scam earlier this year.
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Musk, however, took to Twitter to joke about the matter.
Musk joked that if I send you two Doge, you will promise to send me one Doge.
This is a very common scam: Scammers promise big returns, often double an investment. They ask for small amounts of money first, usually in crypto like Bitcoin. Musk appears to have been riffing on the formula by tweeting his own tweet which suggested a far worse deal.
The CEO of a billionaire company was responding to Billy Markus, founder and chief executive officer of Dogecoin alternative cryptocurrency Dogecoin. Markus posted in a tweet: "There are no promises in crypto. Except from scammers."
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He said that it was all about risk. Profits are only earned when other people take their own risks. If you lose money, it is because you took on someone else's risk.
Markus stated that it was ultimately up to you to choose to take risk when investing in crypto. This only underscores how risky investing is in blockchain currencies.
Scammers have been able to use the internet to attack people with impunity, at least in the US. They can also hide behind the anonymity of crypto trading, despite not being subject to any serious regulation.
It is a high-risk, high-reward game, which has made some richer than others, but also left many poorer.
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Even worse, cryptocurrency scams are not going away overnight. They are not likely to disappear completely even with strict policing.
This means that cryptocurrency investors and especially those new to crypto will need to be cautious about investing in it.
Bitcoin.org, which teaches users not to get scammed, gets hacked and replaced with scam
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