Google Sues Scammers Behind Fake Crypto Apps on Google Play

Google sues crypto scammers for defrauding 100,000 users via fake apps, seeking over $75,000 in damages.

By Barry Stearns

4/4, 07:19 EDT

Key Takeaway

  • Google sues individuals for deploying over 87 fake crypto and investment apps on Google Play, affecting 100,000 users.
  • The scammers used tactics like fake balances and promotional campaigns to lure victims, causing significant financial losses.
  • Google seeks damages over $75,000 and a permanent injunction against the defendants to protect its platform's integrity.

Google Initiates Legal Action

Google has filed a lawsuit against a group of individuals, accusing them of deploying fraudulent investment and cryptocurrency exchange apps on Google Play. The tech giant alleges that these apps defrauded over 100,000 global users, marking a significant legal move as it claims to be the first among its peers to combat crypto scammers in court. The lawsuit, lodged in the Southern District of New York, targets individuals identified as Yunfeng Sun, also known as Alphonse Sun, and Hongnam Cheung, also known as Zhang Hongnim or Stanford Fischer. These defendants are accused of creating at least 87 fraudulent apps since 2019, employing deceptive tactics to lure victims into downloading their applications from Google Play and other sources.

Scam Tactics Unveiled

The fraudulent scheme, as outlined by Google, involved various methods to attract victims, including text message campaigns via Google Voice, promotional videos on YouTube, and affiliate marketing strategies that offered commissions for enlisting new users. The apps, designed to mimic legitimate investment platforms, displayed fake balances and returns to convince users of their authenticity. Some users were initially allowed to withdraw small amounts to build trust, while others were informed they needed to meet certain conditions, such as paying fees or reaching minimum balances, to access their funds—tactics that ultimately led to further financial losses for the victims.

Google's Response and Damages

In response to the fraudulent activities, Google has taken steps to remove the implicated apps from the Play Store and is seeking legal recourse to prevent further exploitation of its users. The company's general counsel, Halimah DeLaine Prado, emphasized the importance of this litigation in holding the accused accountable and deterring future misconduct. Google claims it has incurred damages exceeding $75,000, including costs related to investigating the breach and allocating resources towards ensuring the safety and integrity of its platform. The tech giant is requesting a permanent injunction against the defendants, barring them from creating Google accounts or accessing its services.

Management Quotes

  • Halimah DeLaine Prado, General Counsel at Google:

    "This is a unique opportunity for us to use our resources to actually combat bad actors who were running an extensive crypto scheme to defraud some of our users... In 2023 alone we saw over a billion dollars within the U.S. of cryptocurrency fraud and scams and this [lawsuit] allows us to not only use our resources to protect users, but to also serve as sort of a precedent to future bad actors that we don’t tolerate this behavior."
    "Unfortunately, as new technology arises, bad actors exploit that technology to try to defraud users... We have teams that work around the clock to detect fraud and spam and abuse and when we find a unique instance in which we can actually go a step further, we’ll actually engage in affirmative litigation filing a lawsuit to actually create legal protections for our users in a more constructive way."
    "We have a dedicated cybersecurity team that is constantly looking across all of our platforms and services to look for opportunities where we can do more or where we think that users are being abused."