FBI Claims these Fake Apps have Defrauded Crypto Investors for $42.7 Million

FBI Claims these Fake Apps have Defrauded Crypto Investors for $42.7 Million

The Federal Bureau of Investigations (FBI) issued a public warning on fake crypto apps. The FBI has warned crypto investors to be wary of the fraudulent wallet applications in the cryptocurrency space, which have defrauded over $42.7 million from around 244 users. Cybercriminals have been using these apps to steal money from users, especially within this eight-month window (October 2021 and May 2022).

How do Cybercriminals Scam Crypto Investors?

The law enforcement agency published an advisory stating that the hackers have been posing as legitimate cryptocurrency organizations and are trying to convince investors to install these fraudulent apps. Cybercriminals use names, logos, fake websites, and other identifying information used by legitimate organizations in the US.

Once the users installed these apps and operated them, they found themselves unable to withdraw the funds which they has deposited in these app wallets. The users claimed that when they attempted to withdraw these funds, they received notifications stating that to withdraw these funds, they needed to pay taxes. However, even after they paid the taxes, these funds remained locked. 

FBI stated that this approach of cyber criminals to defraud crypto investors has witnessed a significant rate of success. This is due to the consistent targetting of several probable victims driven by increased smartphone penetration and digital asset investments. 

Crypto Investor Scams

During this period, the agency has observed several instances where the criminals fraudulently convinced the users or investors into losing money. In one instance, it was noticed that the hackers posed to be employees of YiBit, the cryptocurrency exchange platform that went out of business in 2018. The hackers used a fake app and stole about $5.5 million from four victims separately. This occurred somewhere between October 4, 2021, and May 13, 2022. 

One high-profile case took place between November 1, 2021, and November 26, 2021. In this case, the cyber criminals claimed to be operating under the Supayos or Supay, the name of a legitimate currency exchange platform in Australia. The criminals targeted two victims and asked them to install an application by Supay. Ultimately, one of the victims ended up losing $900,000.

Another notable case was reported between December 22, 2021, and May 7, 2022. The case observed that some unidentified hackers used 28 individuals to steal around $3.7 million. These hackers claimed to be representatives of some legitimate, unnamed financial organization. 

It was also reported by atlasVPN, that the cyber criminals looted up to $2 billion in H1 2022 alone. The victim base of these hackers belonged to the Ethereum (ETH) ecosystem. They ended up losing over $1 billion in a total of 32 cyber attacks.

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