Is Your Cryptocurrency About To Be Stolen?


    Key Points:

    * Cybercriminals are increasingly utilising apps with the same branding as legal crypto companies to mislead investors.

    * A total of $42.7 million has been stolen from U.S. investors through fraudulent crypto mobile apps.

    * To combat cyberattacks, the FBI established a Virtual Assets Unit.

    App store operators are playing a game of whack-a-mole with fake crypto apps.

    According to a public warning issued by the FBI, an estimated $42.7 million has been defrauded from U.S. investors by bogus cryptocurrency programmes.

    Fake cryptocurrency applications that mimic authentic companies’ logos and identifying information are the subject of the public alert.

    Cybercrime Crackdown:

    Fraudulent bitcoin investment applications are claiming 244 victims, the FBI says.

    Some apps use the same logo as a genuine U.S. financial institution to entice users into downloading their apps and depositing cryptocurrencies into their wallets.

    According to advice published by the SEC, apps that mimic legal crypto organisations’ logos and identifying information are being used to mislead investors. According to the FBI, 244 people have already been defrauded by these phoney applications.

    When cybercriminals exploited the logo of a legitimate U.S. banking institution to convince victims to download an app, they encouraged them to deposit cryptocurrencies into wallets that were supposed to be linked to their accounts.

    To withdraw from the app, victims must pay taxes on their money. However, this was only a deception to extract additional money from the victims, as the withdrawals would remain unavailable even if they paid.

    According to the FBI, 28 victims were robbed of $3.7 million between December 2021 and May 2022.

    Between October 2021 and May 2022, fraudsters under the firm name “YiBit” defrauded at least four victims of around $5.5 million by adopting a similar deception strategy.

    One more instance of criminals using the moniker “Supay” was reported in November 2021. Using the app’s “freeze on deposit” feature, they tricked two people into depositing cryptocurrency into their wallets.

    Crypto Twitter has also been flooded with warnings about bogus apps.

    Scammers on WhatsApp are encouraging victims to download fake crypto apps and deposit money into the app’s wallets, according to a user who recently had a friend fall victim to the scam. The crypto app was gone a week later.

    “Ledger Live Plus” in the Microsoft app store appears to be a bogus Ledger Live crypto wallet programme, according to another user. According to the user, the fake app has allegedly stolen $20,000 from the user.

    ESET, a cybersecurity company, discovered a “sophisticated strategy” earlier this year that would distribute Trojan programmes disguised as popular cryptocurrency wallets. Using these programmes, they would then try to take cryptocurrency from their victims.

    A programme disguised as a Trezor app on Apple’s App Store led to a customer losing $600,000 in Bitcoin (BTC) at the time.

    A June 2022 FTC study shows that more than $1 billion in bitcoin has been lost to scammers since 2021. Almost half of all cryptocurrency-related frauds begin on social media networks.

    To extort more money from the victims, the app asks them to pay taxes on the money they withdraw from the app. Those who made the payments couldn’t get their money back.

    Between October 2021 and May 2022, at least four victims were conned out of $5.5 million by cyber criminals operating under the false firm YiBit.

    After a similar incident with crooks using the name Supay in November last year, two victims were forced to put cryptocurrency into their Supay wallets, which were subsequently frozen until additional monies were added.

    The Crypto Unit of the FBI:

    The FBI revealed earlier this year that it was forming a new crypto branch to combat cyberattacks earlier this year. With the support of crypto industry professionals and resources from across divisions, the Virtual Assets Unit (VAU) can better combine intelligence and operations.

    The FBI should verify an app (and its company) as legitimate before crypto investors download it, and any app with restricted or broken functionality should be treated “with mistrust,” according to the bureau’s advice.

    The National Cryptocurrency Enforcement Team (NCET) of the Criminal Division of the FBI is a part of the VAU, which attempts to follow the transfer of illicit funds and stop the illegal behaviour.

    With the increase in popularity of virtual currencies like Bitcoin (BTC) and Ethereum (ETH), the FBI is issuing a new public warning amid an uptick in cryptocurrency-related cyber crimes (ETH).

    In 2021, victims will have lost $14 billion to crypto-related crimes, up from $7.8 billion in 2020, according to a Chainalysis report. According to a comparable analysis from the FTC, nearly half of all crypto-related frauds originate on social media networks.

    There will be a move to multi-factor authentication, encryption of data, zero-trust security architecture and enhancements in endpoint protection under an executive order signed by U.S. President Joe Biden in May 2021.

    Investors have been warned by the FBI to be on the lookout for unsolicited offers for investment app downloads and to take precautions to verify if an app is real before downloading it.