Thousands of users were scammed into buying fake Android cryptocurrency mining apps, according to a California-based security firm. These apps are advertised as a way of earning money via mining cryptocurrencies, but in actuality they don’t perform any function. Instead, they charge the user for supposed improvements and enhancements to improve their currency throughput.
93K Users Scammed
Scammers tricked more than 93K users by selling them fake cryptocurrency apps through the Google Play Store. These numbers come from the latest report from Lookout, a California-based security firm. According to the report, the apps mimic a frontend for cloud mining platforms. The business model of these apps is to cheat users into thinking they are really mining cryptocurrencies.
In fact, the apps do nothing at all. Compared to similar apps which siphon private data from their buyers, these are more subtle. This is what allowed some of them to remain undetected in Google’s Play Store. Of the 175 apps detected by Lookout, 25 of them were available in the Play Store, and the other could be sideloaded from third-party markets.
All of these paid apps include costly upgrades and subscription models ostensibly to improve the performance of mining. This is how scammers are monetizing these apps. Users are tricked into thinking the apps are really mining currency by showing fake numbers. But they then get an error message when attempting to make withdrawals.
Two Classes: Cloudscam and Bitscam
Lookout divided these apps into two main groups: Clouscam and Bitscam. The main difference between these two is that Bitscam apps also accept payment in cryptocurrencies like bitcoin and ethereum. Cloudscam apps only accept Google payments. Lookout estimates that customers have lost at least $350K investing in these apps.
Google removed the reported apps from the Play Store. However, these are still available from third-party marketplaces. The new boom the cryptocurrency industry is experiencing is making inexperienced people easy targets for scammers. While Google already knows about this, dozens or even hundreds of apps may still be lurking in the Google Play Store.
Lookout advises new investors to do due diligence before jumping into buying a cryptocurrency mining app. Scammers know inexperienced users are now entering the cryptocurrency market in droves, and they will try to take advantage of this boom. The security firm recommends knowing the developers behind these apps before buying them, installing them only from the official app, and reading user reviews of the app to look for any anomalies.
What do you think about these mining scams? Tell us in the comments section below.
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