Although the “crypto winter” is showing signs of thawing, fake cryptocurrency apps have left some investors out in the cold.
The FBI says 244 investors were scammed out of around $42.7 million in less than a year by rogue mobile apps claiming to be legitimate cryptocurrency investment platforms.
According to a new FBI alert, cybercriminals are trying to make money and exploit the growing interest in both mobile banking and crypto investing.
Since October, the agency has observed scammers contacting US investors with fraudulent offers from cryptocurrency investment services and coaxing those investors into downloading bogus mobile apps. These fake apps often use the name and logo of legitimate American companies, and scammers use this information to create fake websites to scam investors.
How scammers are using fake crypto apps to steal funds
Cyber criminals convinced victims to download a fake app that used the name and logo of a real US financial company and deposit their cryptocurrency in a wallet tied to the app, the FBI says.
When several victims attempted to withdraw their funds from the rogue app, they received an email urging them to pay taxes on their investments before withdrawing them. After paying the “tax”, the victims still could not 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 becoming a common method for scammers to steal people’s money for a few important reasons, the report says. There is no bank or other centralized authority to flag suspicious cryptocurrency transactions. And crypto transfers are irreversible, meaning once your money is gone, it’s gone forever.
How to protect your funds 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 an individual’s identity before disclosing your personal information to them.
Make sure an app is legitimate before downloading it and confirm 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 they suspect you may have been scammed by fake cryptocurrency investment apps, contact the authorities through the Internet Crime Complaint Center or your local FBI field office.
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