The fake apps were designed to encourage victims to deposit their cryptocurrency holdings and then charged them a tax to make withdrawals, which they were never able to make.
“The FBI has observed cyber-criminals using the names, logos and other identifying information of legitimate U.S. businesses, including creating fake websites with this information, as part of their ruse to gain investors,” according to a notice from the FBI.
“Financial institutions should warn their customers about this activity and inform customers as to whether they offer cryptocurrency services.”
See also: DOJ Calls for International Cooperation to Fight Crypto Crime
In one instance, scammers spoofed the brand of defunct crypto exchange Yibit, a formerly legitimate cryptocurrency exchange that the FBI said appeared to have closed in 2018. At least four victims deposited $5.5 million using the fake app from October 2021 to May 2022.
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In another incident, cyber-criminals used the name of the Australian currency exchange provider Supay and created a fake app. Two people were defrauded in November 2021, with one being told to make a minimum deposit of $900,000.
Read more: PYMNTS Crypto Crime Series: Latest DeFi Hack Drains Record $625M
The FBI recommends that FIs warn customers about this activity and offer steps they can take to report it. FIs should also periodically conduct online searches for the use of their name, logo, and other identifying information to determine if they are associated with fraudulent activity, the FBI said.
Investors are advised to verify an app is legitimate before downloading it, check if the company or app has a website, and ensure any financial disclosures are “tailored to the app’s purpose and the proposed financial activity.”
Related: Privacy Coins: Blow for Freedom — or Boon for Crime?
