Fake Crypto Apps Have Stolen Over $42 Million From Investors in Under a Year, Warns FBI—How to Stay Safe

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Although "crypto winter" is showing signs of thawing, fake cryptocurrency apps have left some investors in the cold.

The FBI says 244 investors in under a year have been scammed out of around $42.7 million through fraudulent mobile applications that claim to be legitimate cryptocurrency investment platforms.

According to a new warning from the FBI, cyber criminals are attempting to cash in and take advantage of the growing interest in both mobile banking and crypto investing.

Since October, the agency has observed scammers contacting U.S. investors with fraudulent offers of cryptocurrency investment services and persuading these investors to download phony mobile applications. These bogus apps often use the name and logo of legitimate American companies and fraudsters create fake websites with this information to swindle investors.

How scammers use phony crypto apps to steal money

Cyber criminals convinced victims to download a counterfeit app that used the name and logo of a real U.S. financial company and deposit their cryptocurrency into a wallet tied to the app, the FBI says.

When several victims attempted to withdraw their funds from the fraudulent app, they received an email prompting them to pay taxes on their investments before making a withdrawal. After paying the "tax," victims were still unable to withdraw their funds.

More than 46,000 people have lost over $1 billion to crypto scams since the beginning of 2021, according to the Federal Trade Commission's Consumer Protection Data Spotlight.

Cryptocurrency is emerging as a common method for scammers to steal people's money for a few key reasons, the report reveals. There isn't a bank or other centralized authority to flag suspicious transactions made with cryptocurrency. And crypto transfers can't be reversed, meaning that once your money is gone, it's gone for good.

How to protect your money from online crypto scammers

Be wary of unsolicited requests to join or download investment apps, especially if you don't know or have never met the person inviting you, the FBI says. Take steps to verify an individual's identity before handing over your personal information to them.

Make sure that an app is legitimate before downloading it, too, and confirm that the company behind the app actually exists and offers cryptocurrency services, the FBI adds. And treat apps with broken or limited functionality with skepticism.

If you suspect you may have been defrauded through phony cryptocurrency investment apps, contact the authorities via the Internet Crime Complaint Center or your local FBI field office.

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