Fake Celebrity Ads for Crypto and FX Trading Scams Catch Kiwi Regulator’s Attention

New Zealand’s Financial Markets Authority (FMA) issued a public warning against fake celebrity endorsement advertisements promoting crypto and forex investment schemes on social media. Announced today (Monday), the regulator highlighted that the investment websites involved in these fake promotions are scams.

“We have identified multiple websites that are part of this scam, but believe there may be more connected as they frequently change,” the FMA stated, adding that the announcement was based on several reports it received.

“We are aware of several New Zealanders who have invested through these websites and are now unable to withdraw funds, with additional fees requested before allowing withdrawals.”

The Tactics to Trap Victims

Explaining the operations of such scams, the FMA detailed that the scammer creates ads on a social media platform featuring a fake news article, appearing to be from a reputable New Zealand media platform with local celebrity pictures.

“The ad does not at first glance appear to be about investing,” the regulator added.

Clicking on these ads leads to fake news articles on an imposter website that showcase fake interviews with celebrities discussing making big profits using a certain investment platform. These articles also contain links to fraudulent platforms, and after the potential victims provide their contact details, they receive a call from “someone claiming to be a broker or a financial adviser,” asking for a payment of USD 250 or EUR 250.

The scammers even entrust the victims with downloading software for remote computer access. To give a false impression of legitimacy, the scammers initially transfer “profits” to the victim’s bank accounts, only to ask them for higher investment.

“When the victim asks to withdraw funds, they are told they must first pay a high fee to release the money. But even if these fees are paid, no money is returned,” the regulator pointed out.

Authorities Cautious against Fake Celebrity Endorsements

The menace of fake celebrity endorsements is widespread. Scammers usually use existing photo or video clips of celebrities to promote fake investment schemes, making them look authentic. Artificial intelligence (AI) tools have made such scams even more rampant. These fake endorsements usually promote risky derivatives and crypto trading.

Social media platforms like Facebook even faced lawsuits for allowing fake celebrity advertisements to promote cryptocurrency scams. In 2019, a Dutch court ruled against the social media giant, ordering it to remove the fake celebrity endorsements.

Earlier this year, the fake news articles and deepfake videos of celebrities and public figures, including Elon Musk, caught the attention of New Zealand’s neighbour. Then, the Aussie warned consumers to be wary of these scams, especially on social media, where they often appear as sponsored posts or ads.

“The FMA recommends extreme caution when engaging with social media advertising using the image of celebrities to promote investment opportunities,” the Kiwi regulator added in its latest warning. “If you come across these ads, do not click on them and don’t give them your personal information.”