FBI says crypto investors lost $42.7 million in fake apps

A recent report from the US Federal Bureau of Investigation (FBI) revealed that cryptocurrency investors lose tons of money to cyber criminals through fake crypto investment applications. 

FBI warns of fake crypto apps

Scammers took advantage of legitimate investment platforms to defraud investors, the law enforcement agency said. They lured unsuspecting crypto users into downloading fraudulent investment applications which were masked with “names, logos, and other identifying information of legitimate” crypto businesses in the United States. The scammers usually come up with certain excuses to deny withdrawal requests. 

Between December 2021 and May 2022, at least 28 people fell victim to these fake crypto investment apps, losing about $3.7 million. The FBI said about 13 of the victims were presented with tax excuses when they requested withdrawals. 

When 13 of the 28 victims attempted to withdraw funds from the app, they received an email stating they had to pay taxes on their investments before making withdrawals. After paying the supposed tax, the victims remained unable to withdraw funds.

The FBI.

The agency identified at least 244 investors who were affected by the fraudulent scheme, which has been increasingly successful over time. According to the FBI, about $42.7 million has been lost to the scammer.

Over $1 billion lost to crypto scammers

It’s no longer news that cryptocurrency scams have increased significantly. The rate of scam reports rose alongside the popularity of digital assets, including NFTs.

Since the beginning of 2021, cryptocurrency users have lost more than $1 billion to online scammers, according to recent information shared by the Federal Trade Commission in the United States. The data highlighted that about $680 million in crypto was lost to scammers throughout the past year. Nearly half of that amount, $329 million, was lost in the first quarter of 2022.