FBI Issues A Warning To Users Of Crypto Currency Apps

Uploaded on 2022-07-25 in GOVERNMENT-Law Enforcement, FREE TO VIEW, BUSINESS-Services-Financial, NEWS-News Analysis

Cyber criminals are creating fake crypto currency investment apps designed to defraud US investors and exploit investment firms, says the FBI in a warning.

The criminals, who present themselves as legitimate investment firms and crypto currency exchanges, have stolen tens of millions of dollars from more than 200 people by convincing them to download mobile apps and deposit crypto currency into wallets owned by the perpetrators.

The FBI advisory says that these cyber criminals have been convincing US investors to download fake apps, thus leading to financial losses of $42.7 million from 244 victims. “The FBI encourages financial institutions and their customers who suspect they have been defrauded through fake cryptocurrency investment apps to contact the FBI via the Internet Crime Complaint Center or their local FBI field office.”

Some of the apps copy the names, logos, and information of legitimate crypto currency trading and investing platforms. Criminals are both targeting investors and the reputations of the legitimate firms themselves. and were successful in scamming 28 investors out of a combined $3.7 million by using an app to masquerade as a legitimate financial institution.

When some of the targeted individuals tried to withdraw funds that had previously been deposited into wallets located in the app, an email notice told them that they had to pay taxes on the investments. Even after completing the required payment, the funds were still not available.

In another series of scams that occurred between October 2021 and May 2022, cyber criminals used a company named YiBit1 to steal around $5.5 million from at least four people. The victims were instructed to download a YiBit app and deposit crypto currency into wallets associated with their accounts. Several of the investors received an email telling them that they had to pay taxes on their investments before they could withdraw any funds. The four victims who did so were unable to withdraw funds using the app.

While cyber criminals have long relied on crypto currency as a means of financial extortion, they are increasingly turning their attention to targeting crypto wallets and Blockchain bridges, tools that enable users to transfer their crypto assets from one blockchain to another. The FBI recommends investors take the following precautions:

Be wary of unsolicited requests to download investment applications, especially from individuals you have not met in person or whose identity you have not verified. Take steps to verify an individual’s identity before providing them with personal information or relying on their investment advice.

Verify an app is legitimate before downloading it by confirming the company offering the app actually exists, identifying whether the company or app has a website, and ensuring any financial disclosures or documents are tailored to the app’s purpose and the proposed financial activity.