Fake cryptocurrency applications have become the focus of the investigation by the Federal Bureau of Investigation (FBI). An advisory warning has been issued by the agency to the public regarding these apps. According to the bureau, those who have invested in crypto have suffered losses of about $42.7 million because of these apps.
Fake crypto apps
On July 18th, an advisory was published by the FBI in which it said that apps had been created by hackers that mimicked legitimate crypto platforms and companies. The problem with these apps is that they have utilized the same information and logos of authentic crypto companies and this has enabled them to dupe investors.
The FBI disclosed that about 244 US investors had already suffered losses at the hands of these applications. In one of the cases, fraudsters had managed to convince their victims to download an app that boasted the logo of a legitimate financial institution based in the United States. Investors had also been encouraged to make crypto deposits into the wallet addresses that had been linked with their accounts.
How they operate
The truth about the fraudulent nature of the app became apparent when victims attempted to make withdrawals from the fake apps. Upon trying to do so, they were first asked to pay taxes, which was yet another tactic to get people to deposit more funds into their wallets. This is because even after making these payments, victims were still unable to withdraw their funds.
Between the period of December 2021 and May 2022, these fraudulent apps victimized about 28 people and stole funds of around $3.7 million. According to the FBI, a similar strategy was adopted by cybercriminals who used the name ‘YiBit’ to defraud four people between October 2021 and May 2022 and stole about $5.5 million.
In another instance, the name ‘Supay’ was also used by criminals last year in November to defraud investors in the US. Two victims had been defrauded in this situation, as they were motivated to use the wallet within the app for depositing their cryptocurrencies. The funds would then be frozen until the investors deposited more.
As the crypto market has flourished, there has been an influx of cybercriminals in the space who want to defraud their victims. A massive scam occurred last year when the Apple app store had a fake crypto app that stole bitcoin worth $600,000.
Last month, a statement was issued by the Federal Trade Commission (FTC) in the United States, which said that scammers had stolen about $1 billion in crypto last year. The regulator also disclosed that social media was responsible for half of the scams that occur in the crypto market. According to the FBI, it is a must for crypto investors to be aware of any unsolicited requests they receive for downloading investment apps.
This is because most of these turn out to be fraudulent, so it is best to use legitimate platforms for investment purposes in the crypto space.