dogecoin: Beware! Your love for Elon Musk and Dogecoin may land you in a scam

MUMBAI: Even though the ongoing bear phase in the cryptocurrency market has knocked the stuffing out of some investors, there is no denying that investors still see the asset class as the quickest way to make money in financial markets.

That zeal to become a hot shot investor within a short period of time contributed to the frenzy for Dogecoin, a coin that was borne out of a joke but came to prominence due to backing from Tesla founder and billionaire Elon Musk.

However, the craze for the ‘memecoin’, as some like to call it, may be making investors more susceptible to cryptocurrency scams than any other coin.

Suspicious domain registrations for cryptocurrency coins and exchanges have peaked over the last few months, with Dogecoin outpacing the next nearest coin, Ethereum, by 35 times in suspected fraudulent listings, a report by BrandShield, an online threat hunting company, showed.

“It shouldn’t surprise anyone that cybercriminals are following the money and targeting retail investors with both increasing frequency and sophistication through a wide array of fraud schemes,” Yoav Keren, co-founder and chief executive officer of BrandShield said.

BrandShield’s analysis found that Dogecoin, whose price movements are largely swayed by what its patron Elon Musk tweets, has seen an explosive increase in suspicious domain registrations over the past few months.

One unique way in which crypto scammers are duping unsuspecting investors is by impersonating Elon Musk. The self-proclaimed “DogeFather” had more than 205 fraudulent Facebook accounts impersonating him and leveraging his name to defraud individual investors, as well as on other social platforms like Instagram, LinkedIn, and the Russian platform, VK, BrandShield said.

Crypto trading platforms are usually the go-to place for scammers. Popular platforms like CoinBase and Binance have seen 1,728 per cent and 616 per cent surge, respectively, in suspicious domain registrations since August 2020.

“Not only is there a responsibility from these social media companies to address fraud on their platforms, but influencers, brands, and cryptocurrencies also have a duty to protect their fans and eliminate fraud by cybercriminals looking to steal millions from consumers in their name,” Keren said.