Google Sues Two Developers Over Fake Crypto App Scams

Google is suing two crypto app developers in New York federal court, accusing them of luring unsuspecting users into downloading and investing in dozens of fake crypto apps distributed on its Google Play app store.

Reuters reported on Thursday that victims of the crypto scam have lost tens of thousands of dollars. Google alleged that accused scammers — Yunfeng Sun, based in Shenzhen, China, and Hongnam Cheung, based in Hong Kong — uploaded 87 different fake crypto investment apps.

The lawsuit alleged that the two developers and their associates have been using these fraudulent apps to drive their schemes since 2019, garnering more than 100,000 downloads worldwide.

Google accused the developers of breaking its terms of service and violating the Racketeer Influenced and Corrupt Organizations Act. It’s also asking the court to prevent the developers from perpetrating further fraud through its platform and award Google an unspecified amount in damages, The Verge Reported.

“Keeping people safe online is core to our business, and we will not tolerate the misuse of our platforms to facilitate cryptocurrency scams,” says Halimah DeLaine Prado, General Counsel at Google, in an email to Blockworks. “This litigation is a critical step in holding these bad actors accountable,” she added.

Google explained that Sun and Cheung would create fake cryptocurrency exchange and investment apps and upload them to the Google Play Store with fake locations, allegedly misrepresenting them as legitimate investing apps. The duo and their associates would then use a “social engineering” scheme involving random romantic text messages, fake press releases, and YouTube videos promoting the apps to lure in victims.

“The texts would purport to be from wrong numbers, but then the texters would strike up conversations with the victims, developing friendships and romantic attachments,” Google added. After convincing people to invest through their apps, the platform will show investors their balance and returns on investments to make it look convincing.

But, users are usually not allowed to take out their money. They can withdraw only small amounts of their returns, according to Google. “When users tried to withdraw larger amounts of their ‘earnings,’ they were told to pay more money,” Google said.

If the victims turned to their romantic friend to complain, the “friend” or “romantic partner” who had earlier convinced them to invest through these apps would just disappear.

No comment has been made by the defendants yet. The lawsuit, with case No. 1:24-cv-02559, was filed at the U.S. District Court for the Southern District of New York.