The chairman of the Senate Banking Committee, Senator Sherrod Brown (D-OH), has written to the heads of Apple and Google seeking a response to the fake crypto apps that have been making the rounds in their respective app stores.
Earlier this month, the FBI issued a warning that fraudulent crypto apps have already scooped off $42 million from investors in less than a year, as TheCoinRise reported.
These frauds frequently operate by stealing trademarks, brands, and identifying information from other well-known companies. They then produce false applications and use the reputation of the real business to mislead investors into giving them the money.
Brown stated that the cryptocurrency industry, as well as the app stores that promote them, had a duty to warn investors away from such scams. He stated:
“It is likewise imperative that app stores have the proper safeguards in place to prevent fraudulent mobile application activity.”
Crypto apps scams are rising high
The senator has specifically asked Google and Apple to describe the processes they use when approving crypto apps for their respective platforms. The frequency with which they check their apps for fraudulent activity was also questioned, as were their reporting procedures for fraudulent apps.
Brown’s request was made public immediately before a banking committee hearing on Thursday regarding scams in the cryptocurrency and security markets. Sen. Pat Toomey, a supporter of cryptocurrencies, argued in a statement before the hearing that the Securities and Exchange Commission’s (SEC) “regulation by enforcement” strategy has damaged consumers.
According to Kim Grauer, director of research at Chainalysis, the crypto winter has ushered in a time of largely tranquility and protection from crypto apps scams. According to her, this type of fraudulent behavior varies with the state of the market.
Scams that are more complex, like crypto romance scams, are, nonetheless, growing more common. Between January 2021 and March 2022, they cost Americans $185 million in losses, as we reported.
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