Celebrity-Endorsed Bitcoin Scams: The Dangers of False Celebrity Associations

Social media platforms have taken the world by storm, with new apps being launched almost every month and attracting many users, some of whom became celebrities overnight.

Whether you believe it or not, social media platforms have become the main source of income for many. Many who do post their videos or pen their thoughts become overnight celebrities. Out of curiosity or not, many take a look at these famous content creators and start following them.

Although everyone wants to be a celebrity, hoping that they will become a crowd-puller, they thrive on popularity, and only a few can reach the stardom that they yearn for.

On social media platforms, many are so driven to reach stardom that they keep releasing their videos or messages daily. To keep their fans happy and attract new fans, these internet celebrities will go to great lengths, sometimes at the expense of their fans.

The internet is notorious for scams and fraudulent activities. In this internet age, anyone with a computer, smartphone, and a decent internet connection can scam anyone sitting in another corner of the world.

In recent years, cryptocurrency has become quite popular, with Bitcoin being the most popular. Several reasons contribute to the popularity of Bitcoin: it was the first cryptocurrency in the world, it has a huge fanbase, it is quite expensive to buy compared to other cryptos, and it has a guaranteed high return on investments.

In this new age, everyone wants to live a lavish life with huge amounts of money tucked away somewhere safe, and they want it all in a short period. One of the best ways to multiply their money is by investing in cryptocurrencies, especially by promoting Bitcoin scams. But need to be aware of different types of cryptocurrency investment scams and also their recovery.

For some, the thirst to reach stardom with a huge amount of money makes them do things that they do not regret. And for this reason, many corporations take advantage of them by promising a huge sum of money to promote their products.

Sometimes scammers will impersonate these celebrities by creating a fake account with the same profile photo as the celebrity that they are impersonating.

In the crypto industry, it is quite common for developers to pass on a few cryptos for free to promote and popularize them.

There have been a few instances where scammers have pulled cryptos, leading to various types of cryptocurrency scams.

These scammers will announce on social media platforms that they will give X times the amount of Bitcoin or crypto if they send some to the given wallet address or to a link that will direct them to a website that prompts them to fill in the requisite details.

These are elaborate scams, as many rush in to multiply their cryptos. The number of cryptos or Bitcoins sent on the link never multiplies, and the link provided to the fake website will collect usernames and wallet addresses. With this information, these scammers will hack into the user’s account, wiping off their entire Bitcoin or crypto holdings.

Sometimes huge corporations will pay a huge sum of money to social media influencers to promote their products. One of the latest examples is that of FTX, a crypto exchange.

When FTX was launched, the founder paid a huge amount of money to celebrities to endorse and promote FTX. Several ads were made to promote it, and many celebrities were seen promoting it.

When many celebrities were seen promoting FTX, many American citizens believed them and shifted their cryptos to FTX. However, the corrupt nature of the founder and the mismanagement of the firm led FTX to bankruptcy.

Many crypto users had their accounts frozen and, to date, have not received their crypto holdings back.

Gwyneth Paltrow, Madonna, Tom Brady, and baseball Hall-of-Famer David Ortiz are among the celebrities charged by the Securities and Exchange Commission, or SEC, with promoting a fraudulent cryptocurrency exchange and duping many crypto users and traders.

A new trend has emerged where internet celebrities without any financial credentials have started giving financial advice to their audience. A few are worth following as they do a thorough analysis, and based on their recommendations, many invest and trade, reaping a huge profit in the process.

In recent times, many social media influencers have gone rogue; they have repeatedly cheated their fans to make substantial amounts of money.

Many have resorted to Pump-and-Dump and Rug-Pull strategies not only for Bitcoins but also for other cryptos. They have time and again cheated their innocent followers. While these celebrities have made a huge amount of money, their hapless followers who follow them faithfully have been on the receiving end.

Celebrities such as Celeste Barber, Kochie, and Waleed Aly have been charged by the SEC for duping their followers into endorsing fraudulent activities.

These celebrities were charged with a Pump-and-Dump scheme where many of their followers invested in Bitcoin only to lose their profits. A new trend has been emerging where scammers, in an attempt to legalize their crime, have been found using well-known news sites and government sites.

Paradigm shift

Each year, Bitcoin scams break their record for having the most number of victims and the total amount of money involved in those scams. Such a crisis has triggered a strong reaction from the citizens of the developed nations to take a strict course of action while simultaneously protecting their financial interests.

Taking into account that many citizens are falling victim to a cryptocurrency or Bitcoin scam, the government of the United Kingdom has taken stringent steps. The UK government has made it clear to these celebrities that they should avoid providing any financial advice to their followers.

The new law by the UK government states that if any celebrity without any financial background provides any investment-related advice and if that advice leads to a scam or fraud, then they will be facing imprisonment, a hefty fine, or both.

Final thoughts

It is high time that the Securities and Exchange Commission, or SEC, and the Commodities and Futures Trade Commission, or CFTC, take keen notice and start regulating these crypto exchanges, giving them clear and direct guidance regarding crypto trade and investments.

Although cryptos have been around for more than a decade, the SEC and CFTC have yet to provide clearer directions so that end users’ financial interests can be protected.

Many crypto exchanges are willing to follow the guidelines provided by the SEC and the CFTC, but they have yet to provide one.

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