I don't use instagram but name there is changable right?
If no one is using the name that we wanted to change then yes, but someone is really going to spend $5K just for a username which has zero benefits apart from scamming purpose.
I'm not sure but if a project and they were taken first by someone to choose that name, we don't know if they'll do.
But if I'm them, I'll just add some characters or letters and won't pay any amount. And yes, just be careful with such scams.