Some of them serve as a conduit for fake exchange platforms, while others are designed to impersonate real applications and trick users into disclosing their login information. In either scenario, actual people have their cryptocurrency stolen.
The head of the Senate Banking Committee wrote nearly identical letters to Apple and Google on Thursday, asking for clarifications about how these tech giants are assessing and ultimately approving the kinds of trading apps that appear to facilitate cryptocurrency fraud.
Hours before the committee’s hearing on “scams and risks in crypto and securities markets,” letters were received.
The “safest place to find and download apps,” according to Apple, is its App Store, which it claimed to have stopped nearly $1.5 billion in fraudulent transactions in 2021.
The letters’ chairman, Sen. Sherrod Brown (D-Ohio), said it is “imperative” that app stores have “proper safeguards” to reduce fraud. Responses from the companies are due by August 10th.
One such app, Metatrader 5, which is still accessible on the app stores of both companies, has allegedly been used in cryptocurrency scams.
A scammer will frequently start luring a victim with an unsolicited text message or a LinkedIn message. On a dating app, they will occasionally start messaging a victim.
After talking with the victim for a while, the con artist will typically tell them to purchase cryptocurrency from a reliable source, such as Coinbase, and then tell them to send it to a phony exchange using an app like Metatrader.
The attacker can deceive the victim into thinking they have made money there. However, the victim will ultimately discover that they are unable to withdraw their money.
One California-based victim, whose identity the news source is withholding at his request, claimed that he had suicidal thoughts after losing $1.2 million late last year as a result of a scam and fake trades made on Metatrader.
On my way to my parents’ house in San Francisco, I had this thought of ramming the car into a barrier and just let that be and let God decide whether I would live through this or I would die
The website for Metatrader does not provide contact information for any of its international offices.
The FBI issued a formal warning to the public earlier this month, noting that at least 244 victims had lost $42.7 million in total due to these fraudulent apps.
The Federal Trade Commission reports that recent losses from romance scams, many of which use online dating services, have “skyrocketed.” The reported losses for the previous year were at an all-time high of $547 million.
These “pig butchering” scams, which are a subset of these romance scams that involve cryptocurrency, tempt victims to keep depositing money into a phony cryptocurrency app, fattening them up, before the scammers flee with sizable sums of cryptocurrency.
The FTC also noted that between 2020 and 2021, crypto payments to con artists increased five-fold, reaching $139 million.
An advocacy group, the Global Anti-Scam Organization, stated last month that it is incredibly uncommon for victims to be able to get their money back.