FBI Warns Of Fake Crypto Applications That Lose USD 42.7 Million Investors. he FBI recently issued a warning to consumers about various fake crypto applications that have defrauded 244 victims of around USD 42.7 million since October 2021.
This was conveyed by the FBI in a warning letter, published on Monday, July 18, 2022 local time. “The FBI has observed cybercriminals contacting U.S. investors, fraudulently claiming to offer legitimate cryptocurrency investment services, and convincing investors to download fake mobile apps, which have been used by criminals to defraud cryptocurrency investors,” the FBI warning letter reads. from CNBC, Wednesday (20/7/2022).
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The FBI identified one case in which individuals operating under the company name YiBit defrauded victims of USD 5.5 million, and another case in which individuals pretending to be US financial institutions managed to defraud investors of USD 3.7 million.
YiBit convinces its users to download the YiBit app and deposit crypto. After this deposit, 17 victims received an email stating they had to pay taxes on their investment before withdrawing the funds. Four victims could not withdraw funds.
The FBI said another app, called Supayos, or Supay, also scammed investors by asking for deposits and then freezing one user’s funds after telling him the minimum balance requirement was $900,000.
More than 99 percent of Gen Z and 98 percent of millennials use mobile banking apps regularly, and the FBI encourages investors and financial institutions to be wary of unsolicited requests to download investment apps.
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The FBI recommends verifying applications and companies are legitimate before providing them with any personal financial information.
Earlier, the UK central bank’s deputy governor for financial stability, Sir Jon Cunliffe, warned cryptocurrencies are highly vulnerable to sentiment and have the potential to collapse. He urged regulators to “get on with the work” and regulate crypto immediately.
“Financial assets with no intrinsic value are only worth what the next buyer will pay. Therefore they are inherently volatile, highly vulnerable to sentiment and prone to collapse,” said Cunliffe quoted from Bitcoin.com, Tuesday (19/7/2022).
He describes some crypto assets as purely speculative, unsupported, stating bitcoin, for example, has nothing behind it. He also repeated his previous warning that if one invests in crypto assets, one should be prepared to lose all the money.
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The UK central bank added that the recent volatility in the crypto market does not pose a risk to the financial system as a whole, as cryptocurrencies are not sufficiently integrated into other financial systems.
FBI Warns Of Fake Crypto Applications That Lose USD 42.7 Million Investors. However, Cunliffe stressed that the boundaries between crypto and traditional financial systems will become “more and more blurred”.
He said, without action, systemic risks will arise, especially if crypto activity and its relationship with other banks and markets continue to grow. He stressed regulators need to “get on with the work” and bring crypto within the “regulatory perimeter.”
“The interesting question for regulators is not what will happen next with the value of crypto assets, but what we need to do to ensure prospective innovations can occur without incurring increases and potential systemic risks,” said Cunliffe.
Federal Reserve Vice Chair Lael Brainard also said last week crypto financial systems are “vulnerable to the same risks” as traditional finance.
“Future financial resilience will be greatly enhanced if we ensure regulatory boundaries span the crypto financial system and reflect the principles of equal risk, equal disclosure, equal regulatory returns,” Brainard said at the time.
Last week, the Governor of the UK’s central bank, Andrew Bailey also told UK lawmakers that cryptocurrencies have no intrinsic value, warning that unbacked crypto assets are “very high risk.”
Previously, the price of bitcoin and other top cryptocurrencies was still volatile. Despite the decline, many analysts and industry players believe this level is not yet the lowest point Bitcoin can reach.
Bitcoin has plunged more than 70 percent from its record high in November. Over the past few weeks, bitcoin has been trading in a tight range between USD 19,000 and USD 22,000 with no major catalyst for gains and traders are trying to figure out where the bottom is.
In the current situation, analysts and industry players believe there are several factors that could push Bitcoin to its bottom. Reporting from CNBC, Monday (18/7/2022), here are the factors driving Bitcoin to reach its lowest point.
Macroeconomic Deteriorating
Bitcoin has been hurt by the macroeconomic situation of soaring inflation that has forced the US Federal Reserve and other central banks to raise interest rates to the detriment of riskier assets such as stocks and cryptocurrencies.
Cryptocurrencies have seen some correlation with the US stock market and have fallen along with stocks. There are also recession fears but the deteriorating macroeconomic picture could help crypto markets find their bottom.
“I think if inflation is under control, the economy is under control, there is no really severe recession” then the market will stabilize,” said CK Zheng, co-founder of cryptocurrency-focused hedge fund ZX Squared.
US inflation data for June came in hotter than expected on Wednesday, deepening concerns the Fed will become more aggressive in its fight to tame rising prices. However, there are some signs it could peak.
Vice president of corporate and international development at crypto exchange Luno, Vijay Ayyar explains some trading patterns that might help define the bottom of the market. He said there could be a “capitulation candle,” where the price of bitcoin could fall further.
“If this happens, it shows liquidity has been captured at lower levels and the market is now ready to bounce back,” Ayyar said.
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FBI Warns Of Fake Crypto Applications That Lose USD 42.7 Million Investors. He noted this happened in March 2020 when bitcoin was down more than 30 percent in a day before continuing to rise over the following weeks.
The second pattern could be an “accumulation phase” where bitcoin bottoms out and spends several months there before moving higher.
In either case, that could see bitcoin drop further to between $13,000 and $14,000, which would be a drop of around 30 percent from the cryptocurrency’s price on Wednesday.
