That celebrity-endorsed bitcoin ad is probably a scam

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Fake Bitcoin endorsements

ASIC (Australia’s corporate, markets and financial services regulator) 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.

Wealthness Pty Ltd ABN 13 231 248 112  [t/a Better Financial Planning Australia]  is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL No. 236523. It is important to be aware that Better Financial Planning Australia is not authorised by Infocus to provide advice relating to credit services or property advice. Infocus is not responsible for any advice outside of the scope of this authorisation and should you wish to act on any of this general information, please first seek professional financial advice.

Wealthness Pty Ltd t/as Better Financial Planning Australia will endeavour to update the website as needed. However, information can change without notice and Wealthness Pty Ltd t/as Better Financial Planning Australia does not guarantee the accuracy of information on the website, including information provided by third parties, at any time.

This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. Infocus Securities Australia Pty Ltd strongly suggests that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based upon their own personal circumstances. Although we consider the sources for this material reliable, no warranty is given and no liability is accepted for any statement or opinion or for any error or omission.

Wealthness Pty Ltd t/as Better Financial Planning Australia does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this website. Except insofar as any liability under statute cannot be excluded, Wealthness Pty Ltd t/as Better Financial Planning Australia and its employees do not accept any liability for any error or omission on this website or for any resulting loss or damage suffered by the recipient or any other person.

Wealthness Pty Ltd (ACN 613 313 250) [t/a Better Financial Planning Australia] Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL Licence No. 236523.

Source: ASIC NewsHub

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