The popularity of cryptocurrency has been rising. Bitcoin, Ethereum, Tether, etc. are the names of some popular cryptocurrencies. Even Intel has introduced Blockscale for cryptocurrency mining.
As bitcoin mining is still profitable, people are becoming more interested in investing in cryptocurrency, but beware of fake crypto apps. Due to its decentralized and irreversible nature, scammers are currently on the run. The FBI has reported that more than 240 investors have been scammed and stole around $42.7 million by trapping mobile apps that claimed to be authentic.
Scammers scam through fake crypto apps
There are many fake crypto apps and websites that scammers have created to trick you with exciting skims and offers. They use social engineering strategies to trade through these platforms. In most cases, new users get scammed because they cannot differentiate between fake and real crypto apps. The FBI says that these tricksters use the name and logo of real financial companies in the US and credit their cryptocurrency into the wallet attached to that app.
To some extent, the scammers become good friends or advisors of the victims on social platforms using other apps. Once they gain the target’s trust, they convince them to download the fake crypto apps and transfer the funds. Then the fund becomes “locked in” forever from where victims cannot withdraw their money and scammers become rich.
Highly intelligent scammers create trustworthy cryptocurrency platforms by showing fake testimonials or trading records to lure you into investing in them. These fake crypto apps and websites are designed as phishing pages where the scammers keep all the credentials including passwords and recovery phrases from the victims so they can scam in their crypto wallets and financial platforms. It’s important that you thoroughly investigate an app or website before you use it to buy cryptocurrencies.
Recent scams
According to the FBI, the outrage of the crypto scam started between December 22, 2021 and May 7, 2022. It caught 28 victims with $3.7 million. One of the victims shared his bitter experience of being scammed, sharing that they were “motivated to download a fake crypto app. I checked that the logo and name represented a real US financial institute so I didn’t bother and invested my money in the cryptocurrency. Later, when I wanted to withdraw, I couldn’t. I even paid tax but still was unable to withdraw their crypto.”
The FBI reported two more scams from fake crypto apps. One ran from October 4, 2021 to May 13, 2022. This time, the scammers used their name as YiBit and stole around at least $5.5 million from four victims. The other scam happened between 1 November and 26 November 2021 under Supayos (and Supay). It is the name of an exchange provider in Australia. A victim shared that he was signed up for an account with a fixed minimum of $900,000 balance.
Take notes to protect from being scammed
Judging from the reported cases, one thing is clear: fake crypto apps use the name of an existing platform to gain the victims’ trust. The FBI suggested that users “verify an app is legitimate before downloading it by confirming the company offering the app actually exists” and identify if the company or app has a website.
If you don’t want to get tricked by the scammers, here are some tips to note:
- It is important to check online if the platform is still up and running with its official apps. The apps must be available in official channels, like Apple App Store, Google Play Store, or on their real company website.
- For websites, take a closer look at the web address and understand if it is legitimate. If you find it fishy or sounds something like “cryptoinvesting.citibank.com”. These types of links might be a scam.
- Avoid suspicious or unfamiliar crypto apps even if it contains the name of a trusted financial institution. If interested, dig a bit more, talk to the platform and verify their crypto apps. Always ensure the financial disclosures and documents. You should check if there are financial disclosures or documents are tailored to the app’s purpose and the proposed financial activity.
These simple tips can protect you from being a victim of fake crypto apps. Keep yourself updated with recent tracks and open your eyes while investing. Don’t fall into the trap of a fraudster by giving up your everything for a fake crypto app.
Photo credits: The feature image has been taken by Hay Dmitriy. The other images have been taken by Andrea Piacquadio and Maxim Ilyahov, respectively. All images used are only symbolic.
Sources: Elizabeth Montalbano (ThreatPost) / Karen Hoffman (SC Media)
