The Federal Trade Commission (FTC) issued a consumer alert last month regarding the growing risk of crypto frauds. The FBI is now adding its voice to the chorus by issuing its own warning.

FBI Cautions Against Crypto Scam Apps

The agency is alerting banks and investors about an eight-month period of increased cybercrime activity involving phony bitcoin apps.

A report released on July 18 states that the Federal Bureau of Investigation has identified 244 victims in various crypto-related cyber crimes, with an estimated loss of $42.7 million.

The Bureau is currently alerting institutions and investors to fraudulent crypto investment “apps” that make claims to provide services. Investors are encouraged to download mobile apps with the names and logos of other reliable financial institutions by the con artists.

The Bureau said:

“The FBI has observed cybercriminals contacting US investors, fraudulently claiming to offer legitimate cryptocurrency investment services, and convincing investors to download fraudulent mobile apps, which the cybercriminals have used with increasing success over time to defraud the investors of their cryptocurrency.”

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“The cyber criminals convinced victims to download an app that used the name and logo of an actual US financial institution and deposit cryptocurrency into wallets associated with the victims’ accounts on the app,” the document reads. “When 13 of the 28 victims attempted to withdraw funds from the app, they received an email stating they had to pay taxes on their investments before making withdrawals. After paying the supposed tax, the victims remained unable to withdraw funds.”

Cybercriminals impersonating genuine companies scammed at least 28 individuals between December 2021 and May 2022 of assets valued at about $3.7 million.

BTC/USD barrels towards $24k. Source: TradingView

Two Apps Fingered

Although there are undoubtedly more, the FBI identified two particular apps—Yibit and Supayos—as some of the primary offenders.

Active since October and November 2021, respectively, the app developers persuaded unsuspecting retail investors to fund these apps with their money before eventually withdrawing it themselves. Additionally, since late 2021, some of the attackers have pretended to be US financial organizations in order to achieve the same result.

Others make fictitious gorgeous women’s social media profiles and solicit “help” or invite people to co-invest in enterprises that guarantee huge returns on their investments.

Cybercriminals continue to use cryptomining malware, or “cryptominers,” to mine cryptocurrency, while ransomware assaults still use tokens the most frequently.

The FBI advises everyone to use extreme caution when installing apps, to only do so from reputable sources (such as the mobile app repositories of Google and Apple), and to set two-factor authentication on all accounts.

Related reading | Crypto Scammers Pose ‘Significant Threat’ On LinkedIn, FBI Agent Warns

Featured image from Getty Images, chart from TradingView.com