Politicians say they’ve had enough of all the cryptocurrency scams that have robbed American investors of billions of dollars over the past few years. This week, they’ve decided to scrutinize Apple and Google because they feel those companies aren’t doing enough to rein in fraudulent cryptocurrency apps.
After the FBI issued a warning about fraudulent cryptocurrency apps stealing more than $30 million from investors over the course of a year, 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.
In letters to Apple CEO Tim Cook and Google CEO Sundar Pichai, Brown asked them to explain how their companies review and approve cryptocurrency trading and wallet apps that they offer on their app stores.
“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 wrote.
In particular, Brown pointed to one situation in which cyber criminals defrauded at least two dozen investors by creating a mobile app that used the name and logo of a real trading platform. After 28 investors downloaded the app and deposited some $3.7 million in cryptocurrency into digital wallets, they couldn't withdraw the funds from their accounts and essentially kissed their deposit goodbye.
Apple and Google have their work cut out for them
Brown and Senate Banking Committee 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 10th to get Brown their answers.