Apple And Google Are Hosting Fake Crypto Apps Designed To Defraud Investors

In recent years, apps that enable cryptocurrency fraud have popped up on Apple’s App Store and on Google Play. In some cases, they’re meant to spoof legitimate apps and trick users into giving up their login credentials, while others provide a medium to false exchange platforms. In either case, real people are getting their crypto stolen.

On Thursday, the chairman of the Senate Banking Committee sent nearly identical letters to Apple and Google, seeking explanations as to how these tech giants are evaluating and ultimately allowing these types of trading apps that seemingly enable cryptocurrency fraud. The letters came hours before the committee held a hearing on “scams and risks in crypto and securities markets.”

Neither Apple nor Google immediately responded to a request for comment, but both companies do not allow apps to impersonate bona fide apps or to engage in illegal or fraudulent activity. However, last month, Apple said it stopped nearly $1.5 billion in fraudulent transactions in 2021, and noted that its App Store is the “safest place to find and download apps.”

Chairman Sen. Sherrod Brown (D-Ohio), who authored the letters, noted that it is “imperative” that app stores have “proper safeguards” to mitigate fraud. The companies have until August 10 to respond.One such app, known as Metatrader 5, which is still available on both companies’ app stores, has been linked to alleged cryptocurrency scams.

Often, a scammer will begin to lure a victim through an unsolicited text message or a message on LinkedIn. Sometimes they start messaging a victim on a dating app. After engaging the person in conversation for a time, the scammer will usually direct their victim to buy cryptocurrency from a legitimate company, like Coinbase, and then instruct the victim to send it to a purported exchange mediated through an app like Metatrader.

There, the attacker can lure the victim into believing that they have made profits. However, when the victim tries to withdraw their money, they will ultimately find that they cannot do so. One California-based victim, whose identity Forbes is withholding at his request, said that after he lost $1.2 million late last year via a scam and purported trades made on Metatrader, he had suicidal thoughts.

“On my way to my parents’ house in San Francisco, I had this thought of ramming the car into a barrier and just let that be and let God decide whether I would live through this or I would die,” he told Forbes. Metatrader’s website lists no phone number for any of its offices around the globe. Forbes left a message on what appears to be its Cypriot headquarters voicemail and sent emails to multiple email addresses linked to the company. The company did not immediately respond.

Earlier this month, the FBI issued a formal warning to the public, noting that at least 244 victims had collectively lost $42.7 million through such fake apps. According to the Federal Trade Commission, related losses from romance scams, many carried out using online dating sites, have “skyrocketed” recently. Last year, reported losses reached an all-time high of $547 million. A subset of these romance scams involve cryptocurrency, and are sometimes known as “pig butchering” scams, in which victims are enticed to put in more and more money into a fraudulent crypto app—fattening them up—before the scammers abscond with vast sums of cryptocurrency.

The FTC also reported that in 2021, crypto payments to scammers jumped five-fold—reaching $139 million—between 2020 and 2021. Last month, the Global Anti-Scam Organization, an advocacy group, told Forbes that it is extremely rare for victims to be able to recover their lost funds. “I’ve talked to 50 people in the last six months,” said Arlo Kipfer, a Seattle attorney who has also consulted with scam victims on how to move forward. “The most heartbreaking thing is they bleed the victims dry—the odds of recovery are still low.”

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Source: Apple And Google Are Hosting Fake Crypto Apps Designed To ‘Defraud Investors,’ Senator Says

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The United States Federal Bureau of Investigation (FBI) has issued a public warning about fraudulent cryptocurrency applications, which have swindled U.S. investors out of an estimated $42.7 million so far. According to an advisory published on Monday by the securities and intelligence agency, cybercriminals have created apps using the same logos and identifying information as legitimate crypto companies to defraud investors. The FBI noted that 244 people had already fallen victim to these fake apps.

One case saw cyber criminals convincing victims to download an app that used the same logo as an actual U.S. financial institution, encouraging them to deposit cryptocurrency into wallets purportedly related to their accounts. When victims attempted to withdraw from the app, they would be asked to pay taxes on their withdrawals. However, this was just another ruse to part more funds from victims, as even if they made the payments, the withdrawals would continue to be unavailable.

Around $3.7 million was defrauded from 28 victims between December 2021 and May 2022, said the FBI. Another similar operation saw cybercriminals operating under the company name “YiBit,” defrauding at least four victims of around $5.5 million between October 2021 and May 2022, using a similar method of deceit. A third case involved criminals operating under the name “Supay” in November 2021. They defrauded two victims by encouraging them to deposit cryptocurrency into their wallets on the app, which would then be frozen unless more funds were deposited.

Warnings about fraudulent apps have also made the rounds on Crypto Twitter. One user said a friend recently fell victim to a scam that started on the online messenger service WhatsApp, which encouraged the victim to download a fake crypto app and load funds into the app’s wallet. A week later, the crypto app vanished.

Another user says they have fallen victim to a fake Ledger Live crypto wallet app, reportedly called “Ledger Live Plus,” in the Microsoft app store. The user claims the fraudulent app has already stolen $20,000 from him.  Earlier this year, cybersecurity firm ESET uncovered a “sophisticated scheme” that would distribute Trojan applications disguised as popular cryptocurrency wallets. These applications would then attempt to steal crypto assets from their victims. 

Last year, a scam cryptocurrency app dressed up as a mobile Trezor app on Apple’s App Store reportedly led to one user losing $600,000 in Bitcoin (BTC) at the time. A report from the United States Federal Trade Commission (FTC) in June 2022 found that as much as $1 billion in crypto has been lost to scammers since 2021, with nearly half of all crypto-related scams originating from social media platforms.

The FBI has recommended crypto investors be wary of unsolicited requests to download investment apps, verify an app (and the company) is legitimate, and treat apps with limited and/or broken functionality “with skepticism.”

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Apple And Google Under U.S. Senate Scrutiny For Crypto App Fraud

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