The rise of fake cryptocurrency apps and how to avoid them

cointelegraph.com:

Scammers have been taking advantage of blockchain’s decentralized and immutable nature to swindle crypto investors since the advent of the technology.

And, according to the latest FBI fraud report, fraudsters are using fake crypto apps to steal money from unsuspecting crypto investors. It highlights that American investors have lost approximately $42.7 million to swindlers through fake apps.

The schemes reportedly take advantage of heightened interest in cryptocurrencies, especially during bull market runs, to beguile crypto users.

Fake crypto app scammers use myriad techniques to entice investors. The following is a breakdown of some of them.

Some fake crypto app scammer networks use social engineering strategies to entice victims.

In many cases, the fraudsters befriend the victims through social platforms such as dating sites and then trick them into downloading apps that appear to be functional cryptocurrency trading apps.

The scammers then convince users to transfer funds to the app. The funds are, however, “locked in” once the transfer is made, and the victims are never allowed to withdraw money.

In some cases, the scammers lure victims using outlandish high-yield claims. The ruse comes to an end when the victims realize that they can’t redeem their funds.

Speaking to Cointelegraph earlier this week, Rick Holland, chief information security officer of Digital Shadows — a digital risk protection firm — underscored that social engineering remains a top strategy among crooks because it requires minimal effort.

“Relying upon the tried-and-true method of social engineering is far more practical and lucrative,” he said.

The cybersecurity manager added that social engineering makes it easy for scammers to target high-net-worth