Over 170 fake Android apps defrauded over 93,000 users via crypto scams

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Lookout Threat Lab security researchers have discovered more than 170 Android apps, including 25 in the Google Play store, involved in crypto mining scams.

The apps, categorized as BitScam and CloudScam, scam users by promising to provide cryptocurrency mining services for a fee without actually providing any services.

They steal money from users by tricking them into buying premium apps, upgrading subscriptions, or transferring bitcoins to cryptocurrency wallets operated by scammers.

These cryptocurrency scams have coincided with an increase in cryptocurrency investments. The industry reached a market capitalization of over $ 2 trillion during the pandemic.

Malicious Android Apps Exploit Legitimate Payment Processes in Crypto Mining Scams

The apps have exploited legitimate payment processes like Google Pay to receive money stolen from crypto mining scams. They use these channels to steal money from users by promising them services they don’t provide.

Lookout researchers estimated that the scammers scammed more than 93,000 users for around $ 350,000 in crypto-mining scams. The amount includes $ 300,000 for the cost of purchasing fake, fraudulent Android apps and $ 50,000 for bogus upgrades and services.

Unlike other malicious Android apps, fake crypto mining apps do not perform any malicious activity. The lack of malicious payloads allows them to sneak into Google Play Store and other managed app stores. They also easily evade code-based mobile security solutions that scan for malicious apps on mobile phones.

Most fake cryptocurrency mining apps circulate on third party app stores

Researchers have found that only 25 apps involved in crypto-mining scams are available on the Google Play Store. Although Google has removed the apps, crypto-mining scams are said to continue to defraud thousands of investors through third-party stores as the main distribution channels for bogus crypto apps.

Scammers would continue to receive money through other payment processes such as Bitcoin transfers.

Several crooks have created competing businesses targeting victims using similar tactics

The researchers noted that the apps had similar designs and business models and shared the same codebase. Most of the fake crypto mining Android apps required bogus premium upgrades. Some of the apps involved in crypto mining scams also required downloading additional Android apps from the same developer.

The researchers noted that real crypto mining applications would have high-quality and sophisticated code and transfer data to APIs through secure communication. However, the Android apps involved in crypto mining scams have been developed using a framework that does not require programming knowledge.

In addition, applications did not communicate with cloud services to perform actual crypto mining. Instead, the fraudulent cryptocurrency apps had fictitious activities.

Upon login, users were presented with the available hash extraction rate and the amount of coin they earned.

The apps also displayed a fictitious coin balance stored in a counter that was slowly incremented. The counter was reset every time the app crashed or was restarted. In one application, BTC Cash, the counter is reset to zero without contacting any cloud API after counting from 0 to 10.

In some of the apps analyzed, we observed that this only happens when the app is running in the foreground and is often reset when the mobile device is restarted or the app is restarted, the researchers said.

Fake wallet apps provided very low fees to entice users to upgrade to higher rates, faster mining speeds, and a lower minimum withdrawal balance.

They also had a minimum withdrawal balance that users need to earn to withdraw their money. They frequently reset this balance to prevent users from reaching the minimum balance.

Even if a user reached the minimum balance, they could not transfer the money successfully. The app displayed an error message and reset the amount without transferring money every time the user initiated the withdrawal process.

BitScam apps have tricked users into purchasing virtual hardware through Google Play or Bitcoin transfer to increase mining speed. The fake material costs between $ 12.99 and $ 259.99.

While CloudScam apps have made users switch to a subscription plan with higher mining rates and low withdrawal balances, the ability to refer friends and receive 20% of their income and daily rewards.

Lookout security researchers advised users to treat apps with a high level of caution by checking user reviews and only downloading apps from official stores.

Over 170 bogus Android apps, including 25 found on Google Play, defrauded more than 93,000 users of around $ 350,000 through #cryptomining #cryptomining scams. # cybersecurity #respectdata Click to tweet

Although most scammers give fake reviews to boost app credibility, users should read other users’ experiences as well. Honest reviews of scammed users could help expose crypto mining scams.

Likewise, checking app certificates, private keys, and other credentials could help users identify developers and uncover suspicious patterns.

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