FBI Catches on to Crypto Apps Scamming Users

Upwards of 200 individuals have recently been taken advantage of by deceitful crypto firms providing seemingly valid services, resulting in the loss of millions of dollars. According to the FBI, at the outset of 2022, at least 28 individuals were duped out of $3.7 million in a five-month time frame by convincing them to deposit cryptocurrency into fraudulent wallet apps.

According to the FBI warning, these cybercriminals pretended to be a lawful US financial intermediary, but once 13 of the 28 victims tried to make a withdrawal from the application, they got an email declaring they would have to pay federal taxes on their investment portfolios before making withdrawals. These individuals paid, but they never received their funds.

The warning went on to alert about $5.5 million nicked from four YiBit app victims who were informed they would be required to pay taxes on their assets but were still refused admission to their investments after making the payment.

In addition, $900,000 was extorted from one person of Supayos, AKA Supay, which pretended to be a valid Australian currency conversion firm. The company informed the victim that the minimum investment was $900,000, which he refused, and threatened to block all of his investments unless the money was paid.

These are only a few of the latest victims, but it’s evident that this is a serious enough problem that the FBI is starting to take notice. According to them, the cybercriminals’ activities are defrauding American investors and starting to cause reputational damage to US investment companies.

According to a Chainalysis analysis of 2022 crypto crime patterns, unlawful crypto behavior has approached an unusual plateau. It is at its peak in terms of price, but it accounts for the smallest proportion of all virtual currency activity. This makes it evident that fraudsters are becoming more sophisticated.

The number of cybercriminals using crypto as a pretense increased by 79% in 2021, but that figure pales in comparison to cumulative cryptocurrency implementation, which increased by 567% and managed to carry an overall volume of transactions of $15.8 trillion.

However, as the report points out, virtual currency fraudulent profits remain high, and $14 billion in nefarious activities constitutes a substantial issue.

As a prospective cryptocurrency investor, it’s reasonable to think that this would never happen to you. You might think you’re not crazy enough to palm over your hard-earned crypto to some shady investment manager who messaged you out of the blue or to transfer it in an arbitrary wallet app, but it’s never that simple.

Cryptocurrency fraudsters now employ a variety of techniques to entice their victims, including some extremely convoluted methods that no one anticipated, such as when hackers took over the British army’s YouTube and Twitter accounts the other week to stooge NFTs. Even Crypto.com is vulnerable to cyber-attacks.

Despite the unprecedented crash that has led to virtual currency lending institutions filing for bankruptcy, it’s a smart option to double-check the validity of any applications you intend to use if you’re thinking about getting into the cryptocurrency space right now.

Any ordinary hacker could pose as a genuine investment company offering crypto exchanges via mobile applications. Even now, as virtual currency miners consider selling their unexpectedly undesired GPUs, cybercriminals are consistently on the prowl, smelling newly minted blockchain coinage.

Food for Thought

 

One of the primary reasons for the creation of cryptocurrency in the first place was the fact that it could easily be transferred from one individual to another with no trace of it. This core feature of cryptocurrency is what makes it so easy for cybercriminals to take it from people without authorities being able to trace the funds.

The Bottom Line

 

Many governments all over the globe have begun regulating or considering the option of regulating crypto so that occurrences such as this become less likely to occur. In the meantime, one should always make sure to complete their due diligence before just depositing large amounts of money into inconspicuous apps. It is alarming just how easy it is for scammers to set up falsified programs that do nothing but steal the money from individuals looking to get into the cryptocurrency investment space.

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Author: Jason Donaldson