The FBI issued a warning Monday for financial institutions and investors urging them to watch out for fake crypto apps. The bureau said it has identified 244 victims who were defrauded by fake apps and lost a total $42.7 million.
"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," the bureau wrote in a notice.
The FBI found cyber criminals using the names and other information of legit businesses to lure and then defraud investors. The agency identified fraudulent activity happening under the company name YiBit between last October and May, as well as an incident involving scammers operating under the name "Supay" last November. A third case involved cyber criminals convincing victims to download an app that used the name and logo of an actual financial institution and then deposit crypto into wallets on the fraudulent app.
The notice includes recommendations to help institutions and investors detect and prevent fraudulent activity. It suggests financial institutions should periodically search for their company's name and logo to determine whether they're being used for unauthorized activity and should warn customers of this activity potentially happening. It also tells investors to verify whether an app is legit with its associated company and "be wary" of unsolicited requests to use investment apps.
Crypto scams are rampant: According to the Federal Trade Commission, consumers have lost at least $1 billion to crypto fraud between the beginning of 2021 and March of this year. Fraudulent crypto activity is becoming more common, and much of it originates on social media, the FTC found.