FBI warns fake crypto apps cost investors up to $43 million

The Federal Bureau of Investigations (FBI) has raised the alarm over the emergence of fake cryptocurrency wallets that have defrauded unsuspecting users millions of dollars. 

In particular, the agency noted that it had identified 244 victims who lost approximately $42.7 million to the fake crypto app scam in a Private Industry Notification published on July 18.

One notable incident occurred between December 22, 2021, and May 7, 2022, where cybercriminals defrauded at least 28 victims of approximately $3.7 million. Elsewhere, between October 4, 2021, and May 13 2022, a criminal operating under the company identified as YiBit1 defrauded at least four victims of approximately $5.5 million.

Another high-profile case was recorded between November 1 and November 26, 2021, where cyber criminals operating under Supayos, AKA Supay2, targeted two victims and asked them to download a Supay app. One of the victims ended up losing $900,000. 

How scammers are targeting victims 

The FBI indicated that the scammers are targeting U.S. investors claiming to offer legitimate crypto investment services where they are required to install the fraudulent apps. 

According to the FBI, the approach by the scammers has recorded significant success hence the continued targeting of more victims driven by increased smartphone penetration and investments in digital assets. 

“The FBI has observed cyber criminals using the names, logos, and other identifying information of legitimate USBUSs, including creating fake websites with this information, as part of their ruse to gain investors. Financial institutions should warn their customers about this activity and inform customers as to whether they offer cryptocurrency services,” the FBI said. 

In staying safe, the FBI called on users to be wary of unsolicited requests to download investment applications, verify if an app is legitimate and treat any applications with limited or broken functionality with skepticism.

Notably, Finbold also reported crypto hackers looted up to $2 billion alone in H1 2022, with the prevailing victim of these attacks being the Ethereum (ETH) ecosystem, which lost over $1 billion in 32 hacking attacks as cybercriminals thrived.