Google is investigating the fake ads that have appeared on respected websites.
It comes as vulnerable people in Ireland are reported to have lost millions of euro in cryptocurrency-based frauds.
In a separate scams, one victim is said to have lost €1m, while many more are reported to have had €50,000-€200,000 stolen after they were enticed into buying non-existent cryptocurrency.
In the most recent crypto scam,which features Mr Varadkar’s image without his permission, readers are told “Leo is under a lot of pressure” and “banks are chasing him after he revealed his source of income”.
It then creates a false narrative about Mr Varadkar, claiming he is encouraging people to invest their cash in cryptocurrency for significant returns.
The ad, styled to make it appear like a legitimate news article, claims Mr Varadkar is “honest about how he makes his money” and has appeared on The Late Late Show to announce a new “wealth loophole”, which says “he can transform anyone into a millionaire within three-four months”.
The fake ad states: “Leo urged everyone in Ireland to jump into this amazing opportunity before the big banks shut it down for good.”
The scam, which has appeared in adverts served automatically by Google on legitimate news websites, but which are not controlled by those sites, falsely quotes him as saying: “My number one money maker is a new cryptocurrency autotrading program.” It uses the US spelling of programme.
It encourages the reader to deposit up to €25,000 for “immediate” returns.
The advert falsely claims the program is backed by Tesla CEOElon Musk and Microsoft founder Bill Gates.
It also presents a fake profile of a smiling family who say they made a big return after “struggling to make ends meet”.
A spokesperson for the Tánaiste said: “The Government is already toughening up regulations around online misrepresentation. But there is also an onus on all websites to ensure that they do not carry false, incorrect, misleading or defamatory material.”
A Google spokesperson said: “Protecting users is our top priority and we have strict ads policies that govern the types of ads and advertisers we allow on our platforms. We continue to invest significant resources to stop bad actors and we are constantly evaluating and updating our policies and improving our technology and we’ll continue to work hard to keep our users safe.”
Mr Varadkar joins a growing list of high-profile people who have been targeted by online scammers.
In January, broadcaster Miriam O’Callaghan settled her High Court action over false and misleading advertisements published on Facebook.
She took legal action after fake ads, which appeared online in 2018 containing her image and name, falsely claimed she had left her position with RTÉ’s Prime Time programme to promote skincare products.
Irish celebrities including Vogue Williams, Ryan Tubridy, Pat Kenny and Graham Norton have also had their pictures misused by online scammers in recent months.