Cryptocurrency scammers employ a wide range of tactics to mislead investors. Several of these are described in further detail below.
Social Engineering Schemes
Social engineering tactics are employed by several fake crypto app scammer networks to entice their victims.
On social networks like dating websites, fraudsters often make friends with their victims and then convince them to download programs that appear to be cryptocurrency trading apps.
Victims are then enticed to wire money to the phony account they’ve set up for them. It’s not possible for the victims to get their money back once it’s been moved, so it’s “locked in.”
Fraudsters may try to lure victims by promising huge profits. The deceit comes to an end when the victims realize they can’t get their money back.
Brands that are well-known
Some phony crypto app con artists have turned to using well-known brand names to market their fraudulent apps due to the trust and authority they wield.
Fraudsters posing as YiBit employees recently conned investors out of $5.5 million by convincing them to download a fake YiBit crypto trading software, according to the FBI’s most recent report on crypto crime.
As a surprise to investors, the YiBit cryptocurrency exchange was shut down in 2018. The phony app stole the money that was transferred to it.
According to the FBI investigation, phishers using the Supay brand name, associated with an Australian crypto business, defrauded 28 investors out of millions of dollars in another case. The scam, which ran from November 1 to November 26, cost $3.7 million.
Due to a lack of adequate reporting methods, many cases of these scams go undetected, particularly in areas that are anti-cryptocurrency.
Cryptocurrency scams have been uncovered in several significant countries, including India, as well as the United States.
A recent fake crypto app scheme involving many cloned apps and domains exposed by cybersecurity firm CloudSEK in June cost Indian investors at least $128 million, according to research published at the time.
Distributing fake apps through official app stores
Fake crypto app scammers have been known to distribute malware through official app shops.
To unlock crypto accounts on legal sites, some of the apps collect user passwords. Others pretend to offer safe wallet solutions for a wide range of cryptocurrencies, but they really steal your money as soon as you deposit it.
Program integrity is constantly monitored by major marketplaces, such as the Google Play Store, but it is still possible for some fraudulent apps to slip through the cracks.
Increasing numbers of scammers are posing as legitimate app developers on well-known software marketplaces like Apple’s App Store and Google’s Play Store before submitting fake programs.
On both the Apple App Store and Google Play Store, SatoshiLabs exploited this technology to develop a fake Trezor wallet in 2021. User accounts for Trezor hardware wallets were supposedly accessible online without the requirement for a computer connection.
Victims who downloaded the bogus Trezor software had to enter their wallet seed phrase in order to begin utilizing the service. There are several ways to get into a bitcoin wallet, but the seed phrase is one of the most commonly used.
The criminals behind the fake program were able to steal money from customers thanks to the information provided.
Trezor’s fake app was disseminated via a “bait and switch” strategy, according to an Apple statement. Although the software was originally intended to be a cryptography app for encrypting files, it appears to have been modified to become a bitcoin wallet app by its creators. Apple said that it had no idea of the change until it was brought to its attention by the public.
This week, Chris Kline, who is also the co-founder of the Bitcoin IRA retirement investment program, explained to Cointelegraph how significant tech companies in the area are determined to combat phony crypto apps because of the possible damage to their reputation. According to him, “Technology businesses are always looking to improve user education and safety.” Security is a major concern for today’s leading players. Consumers expect suppliers to place a high priority on security while handling their digital assets.
Unofficial app stores, on the other hand, tend to have a higher percentage of fake apps.
How to spot a fake cryptocurrencies app
Fake cryptocurrency apps try to mimic real ones as closely as possible. As a crypto investor, you must know how to tell the difference between real and fraudulent applications.
What to check for while trying to figure out the legitimacy of an app for mobile cryptography.
Spelling, icons and description
Examining an app’s spelling and symbolism is an important first step in establishing its validity. The names and icons of fake apps sometimes sound identical to those of legal programs, but there is usually something fishy about them.
Counterfeit software is more likely to have misspelled program names or developers. The app’s authenticity can be confirmed by conducting a simple Internet search.
If the app has a Google Editor’s choice badge, it is also important to take that into account. Google Play’s editorial staff bestows this honor on developers and apps that have demonstrated a high level of excellence in their work. Apps with this symbol are more likely to be genuine than those that don’t.
Fake apps typically ask for more permissions than they need. This ensures that as much data as possible is retrieved from the devices of the unfortunate victims.
Applications that require administrator access, for example, should be flagged as such by users. As a result of these authorizations, attackers could gain access to a device and obtain sensitive data that can be used to open bank accounts, such as cryptocurrency wallets.
The privacy settings of a phone system can prevent intrusive app permissions.
The number of downloads
To gauge an app’s popularity, look at how many times it has been downloaded. With thousands of positive reviews and millions of downloads, programs made by well-known developers are typically popular.
Applications with a small number of downloads, on the other hand, require greater care.
Confirming authenticity by contacting support
To verify the legitimacy of a support ticket. To avoid losing money due to fraud, contact the company’s official website if you are doubtful about the integrity of an application.
It is also possible to get legitimate programs directly from a company’s official website.
Cryptocurrencies, because they are underpinned by a relatively new technology, must necessarily have challenges with their adoption or use. Criminals have been using bogus crypto apps in recent years to prey on unsuspecting crypto enthusiasts.
If technology companies keep an eye on things, this problem could be alleviated over time despite its long-term persistence.