Fake crypto apps have stolen over $42 million from investors, FBI says

Even as “crypto winter” shows 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 about $42.7 million through fraudulent mobile applications claiming to be legitimate cryptocurrency investment platforms.

According to a new warning from the FBI, cybercriminals are trying to cash in and take advantage of the growing interest in both mobile banking and crypto investing.

Since October, the agency has observed fraudsters contacting US investors with fake offers of cryptocurrency investment services and persuading those investors to download fake mobile applications. 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 fake app that used the name and logo of a real U.S. financial company and deposit their cryptocurrency into a wallet linked to the app, the FBI says.

When several victims tried to withdraw their money from the fraudulent app, they received an email asking them to pay taxes on their investments before making a withdrawal. After paying the “tax”, the victims were still unable to withdraw their money.

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

Cryptocurrency is emerging as a common method for fraudsters to steal people’s money for a few key reasons, the report reveals. There is no bank or other centralized authority to flag suspicious cryptocurrency transactions. And crypto transfers cannot be reversed, meaning that once your money is gone, it’s gone for good.

How to protect your money from online crypto scammers

Be wary 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 a person’s identity before handing over your personal information to them.

Make sure an app is legitimate before downloading it, too, and verify 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 may have been defrauded through fake cryptocurrency investment apps, contact the authorities through the Internet Crime Complaint Center or your local FBI field office.

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