Cryptocurrency and non-fungible token (NFT) scammers have stolen billions of dollars from investors in recent years, from Elon Musk Twitter impersonators to suspicious Discord chats. Politicians and law enforcement are now focusing on Apple and Google, the companies that run large app stores, and how they review fraudulent crypto apps.
Sen. Sherrod Brown (D-OH) asked Apple CEO Tim Cook and Google CEO Sundar Pichai in letters sent on Thursday to explain their processes for reviewing and approving crypto trading and wallet apps for download on their app stores. Brown investigation follows a recent FBI report warning that 244 investors have been duped out of $42.7 million by fraudulent cryptocurrency apps posing as credible investment platforms in less than a year.
It "Must have appropriate security guards in the App Store to prevent fraudulent mobile application activity"
"Crypto mobile apps are available to the general public through app stores, including Apple's App Store," the senator wrote in a letter to Cook on Thursday. "While cryptocurrency apps have provided investors with simple and convenient ways to trade cryptocurrency, reports of fake crypto apps that have scammed hundreds of investors have emerged."
Apple and Google did not respond immediately to requests for comment.
Earlier this month, several federal law enforcement agencies, including the FBI and the Justice Department, began pursuing scammers accused of stealing millions, if not billions, of dollars from consumers. Even as the value of Bitcoin and other cryptocurrencies has declined, the number of scams has increased.
Brown asked the CEOs in the letters to detail their crypto app review and monitoring processes in order to prevent apps from "transforming into phishing" scams. He's also looking for any information Apple or Google has given consumers about fraudulent investment apps.
"While firms that offer crypto investment and other related services should take the necessary steps to prevent fraudulent activity, including warning investors about an increase in scams," the senator wrote. "It is also critical that app stores have the proper safeguards in place to prevent fraudulent mobile application activity."
The inquiries came just hours before the Senate Banking Committee, chaired by Brown, was scheduled to hold a hearing with cryptocurrency experts on how Congress can reduce scams in the cryptocurrency and securities markets.
The senator has given Apple and Google until August 10th to respond to his requests.