Investors have been scammed out of about $42.7m (£35.6m) through fraudulent crypto apps since October last year, the US Federal Bureau of Investigation said.
The FBI identified 244 victims and warned of cyber criminals creating fraudulent crypto investment apps that exploit legitimate cryptocurrency investments.
“Cyber criminals seek to take advantage of the increased interest in mobile banking and cryptocurrency investing,” the Bureau warned.
“The FBI has observed cyber criminals contacting US investors, fraudulently claiming to offer legitimate cryptocurrency investment services, and convincing investors to download fraudulent mobile apps, which the cyber criminals have used with increasing success over time to defraud the investors of their cryptocurrency.”
It said in one instance, cyber criminals had purported to be a legitimate financial institution by using its name and logo to defraud investors, convincing investors to download an app and deposit cryptocurrency in app wallets before scamming them out of $3.7m.
In another instance, fraudsters used the company names YiBit, a formerly legitimate crypto exchange that closed in 2018, and Supay, a fraud company using the same name as an Australian currency exchange provider. They similarly convinced victims to download their apps and deposit cryptocurrency in app wallets, with the former defrauding at least four victims of $5.5m.
The FBI recommended that investors verify an app’s legitimacy and an individual’s identity when approached with unsolicited requests.
It also said financial institutions should make customers aware of such fraud and conduct searches to ensure their company’s name and logo is not used for fraudulent activity.
Crypto fraud has become a serious issue globally, particularly due to the lack of a regulatory regime for crypto.
The UK as well has seen a surge in the amount of money stolen from these scams. Crypto fraudsters in the UK stole over £226m in the year to May 2022, compared with over £142.9m in the previous 12 months.