FBI issues warning over fraud crypto apps

The United States Federal Bureau of Investigation (FBI) has issued a public warning about fake cryptocurrency applications, which have deceived U.S. investors out of an estimated $42.7 million so far.

Cybercriminals have created apps using the same logos and identifying information as legitimate crypto companies to defraud investors. In a case, cyber criminals convinced victims to download an app that used the same logo as an actual U.S. financial institution, encouraging them to deposit cryptocurrency into wallets purportedly related to their accounts.

When victims attempted to withdraw from the app, they would be asked to pay taxes on their withdrawals. Around $3.7 million was defrauded from 28 victims between December 2021 and May 2022.

Another case saw cybercriminals operating under the company name “YiBit,” defrauding at least four victims of around $5.5 million between October 2021 and May 2022, using a similar method of deceit. A third case involved criminals operating under the name “Supay” in November 2021. They cheated two victims by encouraging them to deposit cryptocurrency into their wallets on the app, which would then be frozen unless more funds were deposited.

A report from the United States Federal Trade Commission (FTC) found that as much as $1 billion in crypto has been lost to scammers since 2021, with nearly half of all crypto-related scams originating from social media platforms. The FBI has recommended crypto investors to be cautious of unsolicited requests to download investment apps, verify an app (and the company) is legitimate, and treat apps with limited and/or broken functionality “with skepticism.”