The involvement of celebrities in promoting cryptocurrencies has been questioned, especially with the emergence of digital currency scams advertised by prominent individuals.
During the first quarter of 2022, cases of scams involving cryptocurrencies endorsed by celebrities spiked 61%, resulting in a loss of £2 million, a report published by Santander UK on June 28 indicates.
The bank revealed that the scams resulted in an average loss of £11,872, a growth of 65% from a year ago. By factoring in the scams’ growth rate, the bank warned that the number of cases would likely double in 2022 and grow by 87% compared to 2021.
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Misuse of celebrities
According to Santander, UK Head of Fraud Risk Management Chris Ainsley, bad actors continue to misuse celebrities in sophisticated crimes.
“We’re seeing a worrying rise in ‘celebrity-endorsed’ cryptocurrency scams, where familiar faces are being misused on social media in order to con people out of often life-changing sums of money. Rather than reveling in the promised high returns, people are losing significant sums after being duped by these highly sophisticated criminals.”
He added:
“Always do your homework and thoroughly research any investment opportunity before moving any money – irrespective of who is endorsing it,” said Ainsley.
Furthermore, the report noted that scammers are leveraging social media platforms with the faces of celebrities endorsing specific crypto investment projects. Once the customer submits their information, the scammers tend to employ high-pressure sales tactics, and they unknowingly hand over access to their systems to the scammers.
Notably, the targeted customers tend to open accounts with software provided by the scammer and deposit money. The money is then frozen, and customers lose access to it.
In the UK, billionaire Richard Branson is among the individuals misused by crypto scammers. Consequently, the billionaire is working towards taming the use of his image in crypto promotions.
Celebrity in crypto criticism
The warning comes when most celebrities face criticism for endorsing cryptocurrencies without informing investors about the risks associated with the sector. Some notable crypto sector endorsements include Matt Damon’s “Fortune favors the brave!” ad with Crypto.com.
In general, despite the crypto market meltdown, most scammers are increasingly deploying various means to defraud unsuspecting users.
Finbold reported that as of June 22, Cardano (ADA) ranked as the third most exploited crypto project by scammers who used phishing attacks.
