How Scammers Are Exploiting Investors' Interest in Crypto

The attackers target users through dating sites and lure victims into installing money-stealing apps.

A United Kingdom-based cyber security firm Sophos has revealed a list of 167 fake applications that has duped hundreds of people globally.

These apps impersonate popular financial trading applications such as Kraken, Goldenway and Bittrex, which are available on both Android and iOS devices.

According to researchers at Sophos, the attackers targeted users through dating sites and lured victims into installing money-stealing apps disguised as popular trading apps.

Meanwhile, a report by Washington Post reveals that cryptocurrency scams rose 1,000 percent in the past year and cost consumers at least $80 million.

Impersonating Popular Apps

Jagadeesh Chandraiah, senior threat researcher at Sophos, explained in a post, "the fake applications we uncovered impersonate popular and trusted financial apps from all over the world, while the dating site sting begins with a friendly exchange of messages to build trust before the target is asked to install a fake app. Such tactics make the fraud seem very believable."

After the victim installs the application, the researcher said that the scammers would convince the victims about investing in crypto.

The scammer then lures the victim into making transactions on the app. "All the transactions made on these apps would go to the scammers' accounts, defrauding the victims of their money that they thought went to transacting with a legitimate trading application," added Chandraiah.

Asians Main Target of The Scam

Chandraiah believes that this method of scamming was “driven by the recent significant rise in the value of cryptocurrencies and interest in low-cost or free stock trading."

The cyber security firm also discovered that these fake applications had a functioning customer support chat which gave the impression that the application was a real trading platform.

While analysing these apps, the security firm said that the chat responses were similar across the many fake applications, 'hinting at a singular entity committing the fraud'.

The customer support chat in the different apps would give different recipient bank details which were traced back to Hong Kong.

At least 167 such fake applications facilitated the operations. On the server, the security firm found KYC documents such as passports and driving licences of individuals from Malaysia, South Korea, China, Japan, and India.

Sophos has advised caution against such malicious apps. "Users should only install apps from trusted sources such as Google Play and Apple's app store," it said.