Legislators grill Apple, Google over recent Cryptocurrency app-driven frauds

*Regulatory officials are demanding the two global technology companies to explain why fraudulent apps make it to market, and defraud crypto investors

Isola Moses | ConsumerConnect

For the Big Techs’ alleged failure to prevent fraudulent activity in crypto investment and other related services, including warning investors, on their platforms, regulatory authorities have said enough of all the cryptocurrency scams that have robbed American investors of billions of Dollars over the past few years.

The Congress, past week, decided to scrutinise Apple and Google because they feel those companies are not doing enough to rein in fraudulent cryptocurrency apps.

ConsumerConnect learnt  the US Federal Bureau of Investigation (FBI) had earlier issued a warning about fraudulent cryptocurrency apps stealing over $30 million from investors over the course of a year.

Subsequently, Sen. Sherrod Brown (D-OH) and his Senate Banking Committee questioned Apple and Google officials to find out why those apps ever made it to market, agency report said.

In letters to Apple Chief Executive Officer Tim Cook and Google CEO Sundar Pichai, Sen. Brown asked them to explain how their companies review and approve cryptocurrency trading and wallet apps that they offer on their app stores.

The lawmaker stated in his letters to the companies’ CEOs: “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.”

Brown, particularly, pointed to a situation in which cybercriminals defrauded at least two dozen crypto investors by creating a mobile app that used the name and logo of a real trading platform, report stated.

Brown further related that after 28 investors had downloaded the app and deposited some $3.7 million in cryptocurrency into digital wallets, they could not withdraw the funds from their accounts, and essentially kissed their deposit goodbye.

Apple and Google have their work cut out for them

Meanwhile, Brown and Senate Banking Committee have asked the two tech CEOs to provide answers to the following points:

1. Describe the review process your company takes before approving crypto apps to operate in each company’s app store.
2. Describe the steps the app stores take to prevent cryptocurrency apps from circumventing app store policies by transforming into phishing apps.
3. Describe all the systems and processes each company has in place for people to report fraudulent apps.
4. Describe all actions each company’s app store has taken to alert people about actual or potentially fraudulent activity associated with cryptocurrency investment apps.
5. Since January 2020, have either app stores coordinated or shared any actions or activities with other app stores related to the suspension or removal of fraudulent cryptocurrency apps? If so, please explain.

Apple and Google have until August 10, 2022, to get Brown their answers.