Aggregated News From Investment Management Regulators

That celebrity-endorsed bitcoin ad is probably a scam

Report/Flag

Please complete the required fields.



  • Kochie, Celeste Barber and Waleed Aly among many celebrities whose endorsements are being used fraudulently.
  • Bitcoin scammers are fraudulently using prominent news sites and government agencies in an attempt to legitimise scams.
  • Avoid crypto trading scams such as Bitcoin Evolution, Bitcoin Revolution and Bitcoin Trader.

Fake Bitcoin endorsements

ASIC is aware of fake endorsements being used to promote cryptocurrency scams and has received a number of reports from the public.

The fraudulent use of celebrities, prominent businesses, news sites and government agencies in the marketing of financial products and services is a key indicator of a scam.

Celebrity endorsements for crypto offerings identified as fake include Waleed Aly, Mike Baird, Celeste Barber, Andrew ‘Twiggy’ Forrest, David ‘Kochie’ Koch, Michael Rowland, Dick Smith, Karl Stefanovic and Virginia Trioli.

ASIC is aware of two situations in which fake celebrity endorsements are being used:

  • Fake websites posing as crypto trading robots.
  • Cryptocurrency pump-and-dump scams.

What is a crypto trading robot?

A cryptocurrency trading robot or ‘bot’ is a software program that automatically trades crypto coins (such as Bitcoin, Ethereum, Litecoin, StableCoin and Ripple) on the user’s behalf. Some trading bots request permission to access your savings account to carry out the trade. Cryptocurrency trading bots may not be illegal or fraudulent in and of themselves.

Bitcoin Evolution and other fake crypto-trading sites

Bitcoin Evolution, Bitcoin Revolution and Bitcoin Trader are examples of fake websites currently posing as cryptocurrency trading bots.

These websites are advertised using fake celebrity endorsements, which appear on social media sites such as Facebook, Instagram, LinkedIn and Twitter. When an investor clicks on the article or ad, they are often sent to a ‘mirror site’ – a fake version of a legitimate news site such as ABC News.

Reassured by what they think is a legitimate celebrity endorsement, investors who visit the fake crypto-trading website, where generally there is a reference on the website to margin FX trading or contracts for difference (CFDs). The investor is then asked to deposit funds into an account via numerous methods, which may include crypto wallets or bank accounts. In some instances, when the investor logs into their account, it may look as though they are making profits initially (due to fake data), but eventually they will see ‘trading losses’, even though no actual trading is taking place.

When investors eventually ask to withdraw their funds, scammers either cease all contact or demand further payment before funds can be released.

Fraudsters are often based overseas and so are their scam websites, which makes them notoriously difficult to close down. It also makes it almost impossible to track, trace and recover lost money. Money paid into an Australian or foreign account is often cleared and moved within minutes to other offshore accounts.

‘Pump-and-dump’ schemes

ASIC is aware of cryptocurrency pump-and-dump scams.

To pull off these scams, fraudsters combine online search terms – for example a cryptocurrency plus an Australian celebrity’s name and image – to generate fake news articles and ads on social media. Online search engines and news sites often republish those articles or ads, perpetuating excitement and interest in the cryptocurrency, leading to a purchasing frenzy.

As more people buy into the cryptocurrency, its value rises (‘pumps’ up) and other traders latch on, further boosting its price. The scammers then sell (‘dump’) their own share in the now-overvalued cryptocurrency. This causes its value to plummet, along with any hope for victims of recovering their initial investment.

Think you have been scammed?

If you think you or someone you know has been scammed, lodge a report of misconduct with ASIC and report the matter to police. You can also make a report to the Australian Cyber Security Centre at ReportCyber. Your report may disrupt the scammers and hopefully will warn others to avoid it.

Source link

Regulator Information

Abbreviation: ASIC
Jurisdiction: Australia

Recent Articles

Directive for the beneficial ownership register of express trusts and similar legal arrangements

See the Press Release published by the Cyprus Securities and Exchange Commission (CySEC CY) here: Source link

RichmondSuper

Attention! The FMA warns investors against concluding transactions with: RichmondSuper https://www.richmondsuper.com (Link to external page. Opens in new window.) [email protected] [email protected] [email protected] [email protected] [email protected] (Link to external page. Opens in new window.) This provider...

Hardson Becker Global

Attention! The FMA warns investors against concluding transactions with: Hardson Becker Global with its registered address apparently in Hangzhou, China www.hardson.com This provider is not authorised to carry...

“Let’s talk about money” – money laundering: how illegal assets are given a legal appearance

In the latest edition of its consumer information series, “Let’s talk about money” the Austrian Financial Market Authority (FMA) explains about the term money...

Chair Powell will host town hall with educators August 2, 2021 at 4 p.m. EDT

Please enable JavaScript if it is disabled in your browser or access the information through the links provided below.

Get the latest from Regulatory.News in your inbox!

×