More than two hundred victims have been scammed out of millions of dollars by fraudulent apps offering bogus investment schemes in cryptocurrency, the FBI has warned.
The bureau said 244 crypto-hungry speculators had been conned out of their money in this way, falling for elaborate ploys that used the names and logos of legitimate companies to deceive the unwary.
One of the scams detailed by the FBI saw 28 victims robbed by unidentified crooks of $3.7 million between the end of last year and May – an average of more than $130,000 each.
“The cybercriminals convinced victims to download an app that used the name and logo of an actual US financial institution and deposit cryptocurrency into wallets associated with the victims’ accounts on the app,” it said. “When victims attempted to withdraw funds from the app, they received an email stating they had to pay taxes on their investments before making withdrawals. After paying the supposed tax, the victims remained unable to withdraw funds.”
Another similar con taking place over roughly the same period parted four would-be investors from an eye-watering $5.5 million. In this case, the cybercriminals disguised their activities by going under the name YiBit – a legitimate crypto-dealer thought by the FBI to have folded in 2018.
Once again, victims were instructed to pay a bogus tax on their ‘profits’ only to find they could not withdraw funds.
In another ruse reported by the Bureau, a victim was told he had to deposit $900,000 or have his pre-existing investment frozen. The crooks responsible used the name Supayos, thought to belong originally to a legal currency exchange in Australia, to appear authentic. In other instances, the conmen even set up websites purporting to be similarly genuine to allay suspicion.
Cashing in on the crypto ‘craze’
“Cyber criminals are creating fraudulent apps to exploit legitimate cryptocurrency investments, defrauding US investors and causing reputational harm to US investment firms,” said the FBI.
It added that while mobile apps “enhance user experience and increase legitimate investment,” cybercriminals were also cashing in by exploiting “increased interest in mobile banking and cryptocurrency investing.”
As such, the Bureau has called on legitimate crypto-investment platforms to take steps to warn customers about this criminal trend and advise them on how to avoid falling victim to it.
“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,” it added. “Verify an individual’s identity before providing them with personal information or relying on their investment advice.”
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