- FBI is currently observing fraudulent cryptocurrency services that act like legitimate services and warning the crypto investors about the threat.
- The cybercriminals are instructing the victims to install fake cryptocurrency wallet applications.
- The criminals have managed to convince 244 victims to install the app; their loss is more than $42 million.
The FBI observed cybercriminals contacting US investors, deceitfully posing as legitimate cryptocurrency investment services. The criminals convinced investors to download fraudulent mobile apps. So far, the FBI disclosed 244 victims and an approximate loss of $42.7 million.
Fraudulent crypto apps harm genuine investment firms
Cyber criminals seek to take advantage of the increased interest in mobile banking and cryptocurrency investing
According to the FBI, between 22 December 2021 and 7 May 2022, unidentified cyber criminals who pretended to be legitimate US financial institutions robbed at least 28 victims of approximately $3.7 million. The threat actors convinced victims to download an app that used the name and logo of a verified US financial institution and deposit cryptocurrency into wallets connected with the victims’ accounts on the app. It appears that some of the victims tried to withdraw funds from the app, but they were asked to pay taxes before the withdrawal. After paying the supposed tax, the victims remained unable to withdraw funds.
Another fraudulent activity was discovered between 4 October 2021 and 13 May 2022. The cybercriminals operating under the company name YiBit, which was a former legitimate cryptocurrency exchange that closed in 2018, have stolen approximately $5.5 million from at least four victims. They the used same tactic to convince the victims to download the YiBit app and deposit cryptocurrency into wallets linked with the victims’ YiBit accounts. The victims were sent an email proclaiming to pay taxes on their investments before withdrawing funds. None of the victims could withdraw funds through the app.
Familiar company names
The last activity occurred between 1 November and 26 November 2021. This time the criminals operated under the company name Supayos, as known as Supay; using the same name as a currency exchange provider in Australia. Two victims were instructed to download the Supay app and make multiple cryptocurrency deposits into wallets connected with their Supay accounts. In November 2021, one of the victims was informed that he was enrolled in a program demanding a minimum balance of $900,000 without his consent. When the victim tried to cancel the subscription, the victim was told that he needs to deposit the requested funds or he will have all his assets frozen.
The Federal Bureau of investigation warned the investors and institutions that the malicious actors use the names, logos, and other identifying information of legitimate US businesses. They create fake websites with this information, as part of their tactic to reach genuine investors. The federal agents released a series of recommendations both for financial institutions and investors.
The FBI recommends financial institutions take the following precautions:
- Proactively warn customers about this activity and provide steps customers can take to
report it - Inform customers as to whether the financial institution offers cryptocurrency
investment services or other related services and methods to identify legitimate
communications from the institution to customers - Inform customers whether the financial institution has a mobile application
- Periodically conduct online searches for your company’s name, logo, or other
information to determine if they are associated with fraudulent or unauthorized activity
The FBI recommends investors take the following precautions:
- Be wary of unsolicited requests to download investment applications, especially from
individuals you have not met in person or whose identities you have not verified. Take
steps to verify an individual’s identity before providing them with personal information
or relying on their investment advice - Verify an app is legitimate before downloading it by confirming the company’s offering
the app actually exists, identifying whether the company or app has a website, and
ensuring any financial disclosures or documents are tailored to the app’s purpose and
the proposed financial activity - Treat applications with limited and/or broken functionality with skepticism