In a public warning issued on Monday, the Federal Bureau of Investigation (FBI) said that fraudulent cryptocurrency apps have swindled investors in the US out of $42.7 million between October 2021 and May 2022. The agency said that it has observed “cybercriminals contacting US investors, fraudulently claiming to offer legitimate cryptocurrency investment services, and convincing investors to download fraudulent mobile apps, which the cybercriminals have used with increasing success over time to defraud the investors of their cryptocurrency.” A total of 244 victims have been identified by the FBI.
The FBI said in its advisory that bad actors are taking advantage of the growing interest in mobile banking and crypto investing. Cybercriminals are said to dupe investors by using official names, logos, and other identifying factors of legitimate businesses, including fake websites. Once they gain the trust of investors, they asked them to download an app and deposit crypto coins into their wallets. When the investors would try to withdraw funds from the app, users would get emails stating they need to pay taxes on their investments to be able to withdraw amounts.
When unsuspecting users would pay the supposed tax, their funds would still remain inaccessible. The FBI added that this is also “causing reputational harm to US investment firms.”
What does the FBI recommend?
The FBI advised that financial institutions should proactively warn customers and inform them of the steps they can take to report such cases. The agency also recommends that institutions should inform customers if they do have a mobile app and periodically conduct online searches for their respective company’s logo or other information to spot unauthorised activity.
For customers, the FBI recommends that users should try to verify an app’s legitimacy before downloading it and be wary of unsolicited requests to download such apps. “Treat applications with limited and/or broken functionality with skepticism,” the FBI said in its advisory.
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