$1.4 million lost in a recent Bitcoin related scam

Cryptocurrency trading has increased worldwide to a significant level. So has the level of crypto-related crime. Reports of crypto-related fraud and scams being run by criminals have been reported to authorities across the world.

In the UK in 2020 there were 8,801 crypto crime reports to the UK action fraud team, and 8,131 of these were related to Bitcoin crimes. This was a 24% increase from 2019. Similarly, the U.S. had over 73,000 more crypto crime reports generated than in the UK.

Social media is the most primary vehicle for crypto scammers, who may defraud users and investors after sending bitcoin or signing up for a fake exchange. In fact, the FBI’s Internet Crime Complaint Center (IC3) received over 1,800 complaints related to online scams. This resulted in losses exceeding $130 million in the U.S. alone.

Here’s the recent addition to this category 

Cybersecurity company Sophos highlighted an insight on international cryptocurrency trading scam targeting iPhone users through popular dating apps. According to Imore, cryptocurrency scammers managed “to dupe unsuspecting victims out of a total of $1.4 million.”

They did this by “luring them into downloading fake cryptocurrency apps and investing money, using Apple’s Developer Enterprise program for distribution.” Attackers have expanded from targeting people in Asia to including users in the U.S. and Europe. The report noted

“We have also identified more applications tied to the fraud campaign—which, due to its combination of romance scams and cryptocurrency trading fraud, we’ve dubbed CryptoRom.”

Post further research, the scammers behind this app targeted iOS users using Apple’s ad hoc distribution method, through distribution operations known as “Super Signature services.” Sophos further concluded,

“One of the victims shared the bitcoin address to which they transferred their money, and when we checked at the time of writing, it has been sent over $1.39 million to date. This shows the scale of this scam and how much money fraudsters are making from vulnerable users. This is just one bitcoin address, the tip of the iceberg. There could be several, with millions being lost,”

Here’s how the said scam actually works,

Source: Sophos

Previously this year, in May, a similar scam stripped Asian users of both iOS and Android, of large amounts of cash as well. However, this time, the losses are far bigger for those who wanted to invest in digital currencies. Meanwhile, different victims have shared their stories in the aforementioned illicit scam. The report also mentioned,

“From news reports, we learned one victim lost £63000 (~ $87000). There are additional news reports in the UK of these scams, with one victim losing £35000 (~$45000) to a scammer who contacted them through Facebook, and another who lost £20000($25000) after being scammed by someone who contacted through Grindr.”