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FBI issues a warning of the rise of fake cryptocurrency apps

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The Federal Bureau of Investigations (FBI) is investigating fake cryptocurrency applications and has issued an advisory warning the public about these apps. The bureau said that the fake cryptocurrency apps have caused losses for US investors totaling to around $42.7 million.

FBI issues warning over fake crypto apps

The FBI published an advisory on July 18 saying hackers had created applications mimicking legitimate cryptocurrency companies. These fake applications use the same logos, and information real crypto companies use to dupe investors. According to the FBI, these fake applications had already caused losses to 244 investors.

In one of the instances, the fraudsters convinced the victims to download an application with the same logo as a legitimate financial institution in the US. It also encouraged US investors to deposit cryptocurrencies into wallet addresses linked to their accounts.

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After the victims tried to withdraw the deposited funds from the applications, they were required to make tax payments first. However, this was just a plot to solicit more funds from the victims because the withdrawals would not be enabled even after making these payments.

The fraudulent applications caused losses of around $3.7 million stolen from 28 victims between December 2021 and May 2022. The FBI also pointed to a similar strategy where cybercriminals operating using the name “YiBit” defrauded around four victims out of $5.5 million between October 2021 and May 2022.

In the third instance, criminals using the name “Supay” in November last year were also involved in defrauding US investors. These cybercriminals defrauded two victims by motivating them to deposit cryptocurrencies in their digital wallets within the applications. These funds would be frozen until more was deposited into the crypto wallets.

Rising scams in the crypto market

Amid the notable growth of the crypto market, there has been an increased interest in the space by cybercriminals looking to defraud their victims. Last year, a massive scam happened where a fake crypto app on the Apple app store was used to steal $600,000 worth of Bitcoin.

The United States Federal Trade Commission issued a statement last month saying that $1 billion worth of cryptocurrencies was lost to scammers last year. The regulator also said that around half of the crypto scams came from social media. The FBI also said that crypto investors must be aware of unsolicited requests to download investment applications, as some could be fraudulent.

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