Scammers steal money from investors by exploiting bogus cryptocurrency apps. Some harmful programs are downloaded from legitimate app marketplaces.
Since the invention of blockchain technology, fraudsters have exploited its decentralized and immutable characteristics to defraud cryptocurrency investors.
Additionally, according to the most recent FBI fraud report, scammers are stealing money from unwary cryptocurrency investors by deploying fraudulent crypto apps. It draws attention to the $42.7 million in losses suffered by American investors at the hands of scammers using fraudulent apps.
According to reports, in order to dupe cryptocurrency consumers, the schemes use increased interest in cryptocurrencies, particularly during bull market runs.
How phony cryptocurrency apps swindle users
Scammers behind fake crypto apps employ a variety of strategies to lure investors. The breakdown of a few of them is provided below.
Plan of social engineering
Social engineering techniques are employed by some fraudulent cryptocurrency app fraudster networks to lure victims.
A lot of the time, scammers will become friends with their victims on social media platforms like dating websites before tricking them into downloading fake cryptocurrency trading apps.
The users are then persuaded to send money to the app by the con artists. However, as soon as the transfer is completed, the money is “locked in,” and the victims are never given access to their money.
In some instances, con artists use absurd high-yield promises to entice victims. When the victims discover they can’t get their money back, the scam is over.
Speaking to Cointelegraph earlier this week, Rick Holland, the chief information security officer of the digital risk management company Digital Shadows, emphasized that social engineering is still one of the most popular tactics used by criminals because it needs little effort.
He declared that it was much more beneficial and profitable to rely on social engineering, which has been proven to be effective.
The cybersecurity manager continued by saying that scammers can easily target wealthy people via social engineering.
Well-known brand names
Due to the authority and confidence that well-known brand names enjoy, some scammers of fraudulent cryptocurrency apps have turned to utilizing them to spread their scams.
Cybercriminals posing as YiBit staff defrauded investors in one case of the newest FBI crypto crime report of over $5.5 million after tricking them into downloading a fake YiBit crypto trading app.
Investors were unaware that the actual YiBit cryptocurrency trading firm stopped operating in 2018. The bogus app received money transfers that were stolen.
In a another incident described in the FBI investigation, fraudsters defrauded 28 investors out of millions of dollars by utilizing the Supay brand name, which is connected to an Australian cryptocurrency corporation. Losses from the scheme, which ran from November 1 through November 26, totaled $3.7 million.
Such schemes have been around for a while, but many incidents go unreported since there are no effective routes for redress, particularly in regions that forbid cryptocurrency use.
Investigations in other important countries, like India, have recently identified sophisticated phony crypto app scams outside of the U.S.
According to a research released in June by the cybersecurity firm CloudSEK, Indian investors lost at least $128 million as a result of a recently uncovered phony crypto app scheme involving several cloned apps and domains.
How to recognize a phony crypto app
Apps for cryptocurrencies that are fake are made to imitate real apps as closely as possible. To prevent needless losses, cryptocurrency investors should be able to distinguish between genuine and fraudulent programs.
A description of some of the indicators to watch out for while attempting to confirm the legitimacy of a mobile crypto application is provided below.
Spelling, iconography, and summary
Examining the spelling and symbol of an app is the first step in determining its legitimacy. The name and symbol of fake apps frequently resemble those of authentic ones, but something is usually amiss.
For instance, if the developer or program name is misspelled, the software is probably fake. A brief online search regarding the app will assist in establishing its validity.
A Google Editor’s choice badge for the app should also be taken into account. The Google Play editorial team awards the badge to developers and apps that meet very high standards. It’s doubtful that apps with this mark are bogus.
Permissions for applications
Apps that are fake frequently ask for more permissions than are required. This makes sure they get as much information as they can from the victims’ devices.
Users should be aware of programs that demand privileged access to the device administrator or other off-center permissions. Such authorizations might grant hackers unrestricted access to a device and enable them to gather private information that might be used to open financial accounts, including cryptocurrency wallets.
The privacy settings of a phone system can be used to disable intrusive app permissions.
Amount of downloads
The quantity of downloads an app has typically serves as a measure of its popularity. Numerous reviews and millions of downloads are normal for apps from trustworthy developers.
Contrarily, programs with fewer than 3,000 downloads need to be scrutinized more closely.