On Thursday, Apple and Google’s parent company, Alphabet, received letters from the chair of the Senate Banking Committee, Senator Sherrod Brown, asking about how they regulated and prevented fraudulent apps from supporting crypto scams. The CEOs Tim Cook and Sundar Pichai of Apple and Alphabet, respectively, were asked how they determined whether an app was “trusted and secure” or not. Brown said:
“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. 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.”
Not long after Brown’s letters had been received, the Federal Bureau of Investigation (FBI) announced a public warning about scams due to fraudulent crypto apps. They said that 244 people had been swiped over $42 million between October 2021 and May 2022. Brown, while speaking at a hearing on Thursday, seemed to suggest that the reason for all these scams was not the fault of the company but of lawmakers, saying:
“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.”
Many crypto scams occur through social media platforms, dating apps, and messaging apps to mislead victims into investing in a fraudulent platform, some even going so far as to use the name and logo of a genuine crypto exchange.