Business Magnate Alan Sugar Warns Against Fake Bitcoin Endorsements

  • Sir Alan Sugar has tweeted a warning agaisnt Bitcointrade, an allegedly fraudulent cryptocurrency investment scheme
  • According to Sugar, his lawyers are working on the case, but these scams need to end.

Sir Alan Sugar, a business magnate known for his remarks on the BBC TV series ‘The Apprentice’, has recently warned against bitcoin-related scams using his name, pretending he is endorsing an investment in the cryptocurrency with the organization.

The business magnate’s warning came through social media, where he claimed the scammers were “scum,” and asked his nearly 5.5 million followers to share the message, so no one would fall for their tricks.

Specifically, Sir Alan Sugar warned against Bitcointrader, an organization allegedly run by scammers who attempt to sell individuals cryptocurrencies, but merely take the money victims send over. When told to sue them, the business magnate revealed that his lawyers were “on the case trying to track them down and hand over to the police.”

In a follow-up tweet, he noted that a 74-year-old would-be investor fell for the scam, as it was using his image to imply endorsement. According to the tweet, the individual was tricked into registering on Bitcointrade through a misleading article, and then received a call from the scammers, who persuaded him to invest £250 ($337), while claiming they would call back.

Sugar advised the individual to call his credit card company to get the funds back, but the number of victims falling for similar scams is unknown. These reportedly mostly target old people, as these “think it is new way of making money and get sucked in because they show me [Sir Alan Sugar] and other people as endorsing it.”

According to the UK’s national fraud and cybercrime reporting center, Action Fraud, in March consumers were tricked into sending cryptocurrency scammers a total of £34,000 (about $45,800) in 21 separate cases.

Notably, various other celebrities have seen their images used to promote fraudulent cryptocurrencies and initial coin offerings (ICOs). Some of these celebrities include TV star Deborah Meaden, known for her role in the series Dragons’ Den, and Money Saving Expert founder Martin Lewis.

Lewis has in the past denounced these scams, and notably sued social media giant Facebook for failing to stop ads, which included get-rich-schemes, from using his face and name. At the time he said:

“Enough is enough. I’ve been fighting for over a year to stop Facebook letting scammers use my name and face to rip off vulnerable people – yet it continues. I feel sick each time I hear of another victim being conned because of trust they wrongly thought they were placing in me. One lady had over £100,000 taken from her.”

Martin Lewis

Notably, Facebook has decided to ban cryptocurrency and binary options-related ads earlier this year. The move saw Google, Twitter, and recently Microsoft’s search engine Bing follow its footsteps.

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.