FBI says fake crypto apps defrauded investors of more than $42 million

The FBI recently issued a warning to consumers about fraudulent crypto applications that have scammed 244 victims out of about $42.7 million since Oct. 2021.

“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 warning, published on Monday, said.

The FBI identified one case where individuals operating under the company name YiBit defrauded victims of $5.5 million, and another where individuals pretending to be an unnamed but legitimate U.S. financial institution scammed investors out of $3.7 million.

The Yibit cybercriminals convinced its users to download a YiBit app and deposit cryptocurrency. Following these deposits, 17 victims received an email stating they had to pay taxes on their investments before withdrawing funds. Four victims could not withdraw funds.

The FBI said another app, called Supayos, or Supay, asked for deposits and then froze one user’s funds after telling him the minimum balance requirement was $900,000.

More than 99% of Gen Z and 98% of millennials utilize mobile banking apps regularly, and the FBI encouraged investors and financial institutions to be wary of unsolicited requests to download investment apps. The bureau recommends verifying that an application and company are legitimate before providing them with any personal financial information.