Google Cracks Down on Fake Crypto Investment Apps with Lawsuits

Google has taken legal action against two app developers, Yunfeng Sun and Hongnam Cheung, for their alleged involvement in an “international online consumer investment fraud scheme.” The scheme reportedly operated by deceiving users into downloading fake Android apps from various sources, including the Google Play Store.

These apps purportedly promised significant returns on investment but instead aimed to steal users’ funds. Yunfeng Sun, also known as Alphonse Sun, and Hongnam Cheung, known as Zhang Hongnim or Stanford Fischer, are believed to be located in Shenzhen and Hong Kong, respectively.

The defendants are accused of uploading approximately 87 cryptocurrency apps to the Google Play Store as part of their social engineering scam. It has been ongoing since at least 2019. These apps were downloaded by over 100,000 users, resulting in significant financial losses. According to Google’s complaint, the promised gains from these apps were deceptive, and the scheme extended further. When victims attempted to withdraw their balances, the defendants and their associates allegedly requested additional fees and payments, falsely claiming that these were necessary for victims to recover their initial investments and supposed profits.

Major Cryptocurrencies Seem to be Reviving – A Good Sign for Crypto Investors

This type of scam is commonly known as pig butchering. Google clarified that it does not endorse or adopt the use of this term. The term originates from the concept that victims are lured in with promises of high returns, akin to fattening up pigs before they are slaughtered for their assets.

In September 2023, the U.S. Financial Crimes Enforcement Network (FinCEN) highlighted that these scams are orchestrated by criminal organizations based in Southeast Asia. These groups reportedly exploit hundreds of thousands of individuals. They often lure them to the region with promises of lucrative employment opportunities.

The fraudulent scheme involves scammers employing elaborate fictitious personas to target unsuspecting individuals through social media or dating platforms. They entice their victims with the promise of a romantic relationship. It aimed at building trust to persuade them to invest in cryptocurrency portfolios. These portfolios claim to offer high profits within a short period but are designed to steal funds from the victims.

To make their operations seem legitimate, these financially motivated actors create fake websites and mobile apps. These platforms display fabricated investment portfolios, showcasing large returns to deceive victims into investing their money.

Google stated that Sun and Cheung employed various tactics to lure victim investors into downloading their fraudulent apps. These tactics included sending text messages via Google Voice to target victims in the U.S. and Canada. Additionally, they utilized affiliate marketing campaigns that offered commissions for recruiting new users and posted YouTube videos promoting the fake investment platforms.

FBI Uncovers $41 Million Crypto Theft by North Korea’s ‘Lazarus’ Hackers

The company emphasized that this malicious activity persisted over time. The defendants have actively been concealing their identities by using different computer network infrastructures and accounts. Moreover, they made material misrepresentations to Google throughout the process.

Google emphasized the importance of maintaining the integrity of the apps distributed on Google Play to ensure users’ confidence in the platform. The company stated that by utilizing Google Play for their fraudulent activities, the defendants posed a threat to the platform’s integrity and the overall user experience.

It’s important to note that this issue extends beyond the Android ecosystem. Similar fraudulent apps have been reported on the Apple App Store as well.