Observations from the FinTechECH

A new alert from the FBI warns investors of fraudulent activity regarding cryptocurrency investments. According to the FBI:

“Cyber ​​criminals [are] 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.”

Examples of the fraudulent activity include:

  • Fake bank apps. According to the alert, fraudsters convinced victims to download an app that used the name and logo of an actual US financial institution and deposit cryptocurrency into wallets associated with the victims’ accounts on the app. When 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.
  • YiBit. Operating under the company name YiBit, cyber criminals had victims download an app and deposit cryptocurrency into wallets associated with the victims’ YiBit accounts. Following the deposits, investors received an email requiring them to pay taxes on the investments before they could withdraw funds, which they were unable to do.
  • Supayos. In this scam, victims were instructed to download an app and make cryptocurrency deposits. Fraudsters told one victim he was enrolled in a program requiring a minimum balance of $900,000. Upon trying to cancel the subscription, the victim was instructed to deposit the requested funds or have all assets frozen.

What Should Investors Do?

FBI recommends investors take the following precautions:

  • Be wary of unsolicited requests to download investment applications. As the FBI warns, this is especially true regarding individuals or purported companies the investor has not met in person or knows of already.
  • Verify an app is legitimate before downloading it. This is easier said than done for a lot of consumers, but googling the name of an app before downloading it will likely turn up fraud reports if the app isn’t legit.
  • Treat apps with limited and/or broken functionality with skepticism. This piece of advice is applicable after someone has already downloaded the app, so hopefully potential victims won’t have to rely on this advice if they don’t download the app in the first place.

What Should Banks Do?

The FBI also provided recommendations for what financial institutions should do: