Fake Crypto Apps Stole Over $42 Million From Investors, FBI Says


Although the “crypto winter” is showing signs of thawing, fake cryptocurrency apps have left some investors out in the cold.

The FBI says 244 investors in less than a year have been defrauded out of approximately $42.7 million through fraudulent mobile apps that claim to be legitimate cryptocurrency investment platforms.

Cybercriminals are trying to cash in on the growing interest in mobile banking and crypto investments, according to a new warning from the FBI.

Since October, the agency has observed scammers contacting US investors with fraudulent offers of cryptocurrency investment services and persuading those investors to download fake mobile apps. These fake apps often use the name and logo of legitimate US companies and scammers create fake websites with this information to defraud investors.

How Scammers Use Fake Crypto Apps to Steal Money

Cybercriminals convinced victims to download a counterfeit app that used the name and logo of a genuine US financial company and deposit their cryptocurrency into a wallet linked to the app, according to the FBI.

When several victims attempted to withdraw their funds from the scam app, they received an email asking them to pay taxes on their investments before making a withdrawal. After paying the “tax”, the victims have still not been able to withdraw their funds.

More than 46,000 people have lost over $1 billion to crypto scams since the start of 2021, according to the Federal Trade Commission’s Consumer Protection Data Spotlight.

Cryptocurrency is becoming a common method for scammers to steal people’s money for a few key reasons, the report reveals. There is no bank or other centralized authority to report suspicious transactions made with cryptocurrency. And crypto transfers cannot be undone, which means once your money is gone, it’s gone for good.

How to Protect Your Money From Online Crypto Scammers

Beware of unsolicited requests to join or download investment apps, especially if you don’t know or have never met the person inviting you, the FBI says. Take steps to verify an individual’s identity before providing them with your personal information.

Also, make sure an app is legitimate before downloading it, and confirm that the company behind the app actually exists and offers cryptocurrency services, the FBI adds. And treat apps with broken or limited functionality with skepticism.

If you suspect yourself may have been defrauded through fake cryptocurrency investment apps, contact the authorities through the Internet Crime Complaint Center or your local FBI office.

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