FBI Warns Fake Crypto Apps Are Stealing Millions

FBI Warns Fake Crypto Apps Are Stealing Millions
Photo: Lauren DeCicca, Getty Images

Federal agents have identified 244 victims who lost some $US42.7 ($59) million to fake cryptocurrency apps during the past year, according to a Monday announcement from the FBI. There are plenty of ways to lose money on the internet, and, unfortunately, there are tons of people who fall for these scams, forking over ungodly amounts of money to hackers, believing that they’re just trying out some new Web3 platform.

Starting the week on a cheery note, the bureau warned in its PSA that cybercriminals have been “contacting US investors, fraudulently claiming to offer legitimate cryptocurrency investment services, and convincing investors to download fraudulent mobile apps, which the cyber criminals have used with increasing success over time to defraud the investors of their cryptocurrency.”

In most cases, the scams appear to have been fairly straightforward: the crooks would convince a victim to download an app that used the same name and logo of an actual crypto company. After that, the hackers would persuade the person to make deposits of crypto into wallets that they said were associated with their new accounts. Afterward, victims were typically unable to withdraw any money from the wallets, and the criminals maintained control of the deposited funds.

In one particular case, cybercriminals posed as employees of the company YiBit, a cryptocurrency exchange that appears to have gone out of business in 2018. Using a fake app, criminals were able to pilfer approximately $US5.5 ($8) million from four different victims.

In another, similar case, hackers posed as employees of a fake company called “Supayos,” or “Supay,” which used the same name as a crypto company from Australia.

In yet another scam, unidentified cybercriminals boosted some $US3.7 ($5) million from 28 individuals over the course of just six months by pretending to be representatives from a legitimate financial entity. The FBI didn’t offer more details.

This isn’t exactly new information. It’s been well-known for years that fake crypto apps are a surefire way to lose a lot of money. As a way to avoid this sort of financial disaster, the FBI suggests taking a number of precautionary measures: these include being wary of “unsolicited requests to download investment applications” and taking steps to verify an app is legitimate before downloading it. In Gizmodo’s opinion, abstinence is the safest way to protect yourself: don’t invest in crypto at all.