US Senate Banking Committee Asks Apple And Google Provide Info On Fake Crypto Apps

Senator Sherrod Brown, chair of the Senate Banking Committee, has written letters to the CEOs of Apple and Alphabet, the parent company of Google, requesting details on how the tech companies prevent some apps from promoting cryptocurrency scams.

According to the letters published on Thursday, Brown asked Apple CEO Tim Cook and Alphabet CEO Sundar Pichai for the steps the tech giants were taking in the approval of crypto apps on Apple and Android devices. The senator requested information related to how the companies assessed if apps were “trusted and secure” prevented possible phishing apps through fraudulent apps and reported such apps to users.

“Cyber criminals have stolen company logos, names, and other identifying information of crypto firms and then created fake mobile apps to trick unsuspecting investors into believing they are conducting business with a legitimate crypto firm,” said Brown.

“While firms that offer crypto investment and other related services should take the necessary steps to prevent fraudulent activity, including warning investors about the uptick in scams, it is likewise imperative that app stores have the proper safeguards in place to prevent against fraudulent mobile application activity.”

Senate Banking Committee’s letters came after the Federal Bureau of Investigation on July 18

Brown’s letters came after the Federal Bureau of Investigation on July 18 released a public alert about phony cryptocurrency apps. Between October 2021 and May 2022, scammers stole more than $42 million from 244 victims, according to the FBI. One instance used an app that used the name of a once-reliable crypto exchange.

Brown appeared to lay some of the responsibility for tackling crypto scams on platforms and applications on lawmakers and regulators rather than businesses while speaking at a hearing with the Senate Banking Committee on Thursday about “Understanding Scams & Risks in Crypto and Securities Markets”:

“We hear industry players call for rules of the road when a big fraud is uncovered, and after a big actor has knowingly violated the law. The rules are there, the roadmap is clear, and [the Senate Banking Committee] needs to make sure our regulators enforce the law and protect the workers and families that keep this economy rolling […] Industry shouldn’t be allowed to write the rules that they want to play by.”

A portion of the $57 million in fines the financial regulator levied against trading app Robinhood in June 2021, according to Gerri Walsh, president of the Financial Industry Regulatory Authority Investor Education Foundation, will go toward educating crypto investors, including those who use online accounts or mobile apps. Walsh also mentioned scammers utilizing messaging and dating apps to trick victims into sending money or investing in phony cryptocurrency platforms, and in answer to a question about Instagram posts, she claimed that disinformation on social media was a key component in the spread of such scams.

In June, the Federal Trade Commission published a report estimating that 46,000 Americans lost up to $1 billion in cryptocurrency to scammers in 2021. At the time, the commission stated that social media platforms through advertisements, postings, and messages were the source of about half of all cryptocurrency-related scams.

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