With crypto-based cyber fraud victims having lost more than $42.7 million so far, the United States Federal Bureau of Investigation (FBI) has issued a public warning to raise awareness of scams conducted via fraudulent crypto applications.

The 4-page document titled “Cyber Criminals Create Fraudulent Cryptocurrency Investment Applications to Defraud US Investors” explains that a popular method used by criminals has been to use the logos and identifying information of legitimate crypto companies to deceive investors. There have already been an estimated 244 reported victims of such scams, the FBI explained.  

The advisory highlighted individual cases to explain the extent and sophistication of crypto scammers.

An app displaying the logo of an actual US financial institution was used to lure victims into depositing cryptocurrency into their in-app wallets. When the victims tried to withdraw their funds, they were asked to pay tax on the amount and such attempts to withdraw were blocked even after the “tax payments” were made.

According to the FBI, the scam defrauded 28 victims in 6 months, with the lost funds amounting to $3.7 million. A similar scam operating under the name “YiBit,” robbed at least $5 million out of four different individuals between October 2021 and May 2022.  Another app called “Supay” defrauded victims by freezing funds in the wallets on the app until more funds were added.

Stories of such fraudulent applications have also appeared on crypto Twitter.

The FBI advised investors to be wary of unsolicited requests to download investment applications:

“Take steps to verify an individual’s identity before providing them personal information or relying on investment advice.”

The securities and intelligence agency further advised users to verify the legitimacy of an app before installing it and ensure that any disclosures or documents requested by such apps are tailored to the app’s purpose.

 It also asked investors to “treat applications with limited and/or broken functionality with scepticism”.

The post FBI releases advisory on fraudulent crypto apps appeared first on CoinJournal.

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