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Google sues crypto scammers for allegedly uploading fake apps

Google sues crypto scammers for allegedly uploading fake apps to Play store

Google filed a lawsuit on Thursday against a group of crypto scammers, alleging they defrauded more than 100,000 people across the globe by uploading fraudulent investment and crypto exchange apps to Google Play. 

Google says it’s the first tech company to take action against crypto scammers, and is doing so as a way to set a legal precedent to establish protections for users. The lawsuit claims the defendants made “multiple misrepresentations to Google in order to upload their fraudulent apps to Google Play, including but not limited to misrepresentations about their identity, location, and the type and nature of the application being uploaded.” 

The Alphabet-owned company is bringing civil claims under the Racketeer Influenced and Corrupt Organizations (RICO) law as well as breach of contract claims against the group of scammers, who the company said created and published at least 87 fraudulent apps to dupe users.

“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,” Halimah DeLaine Prado, general counsel at Google, told CNBC Crypto World in an exclusive on-camera interview.

“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,” she added.

The lawsuit, filed in the Southern District of New York, said the alleged scammers, identified as Yunfeng Sun, also known as Alphonse Sun, and Hongnam Cheung, also known as Zhang Hongnim or Stanford Fischer, conducted their scheme since at least 2019. The two allegedly lured victims to download their apps from Google Play and other sources through three methods: text message campaigns using Google Voice to victims primarily in the U.S. and Canada, online promotional videos on YouTube and other platforms, and affiliate marketing campaigns that paid user commissions for signing up people.

Sun, Cheung and their agents designed the apps to appear legitimate, showing users that they were maintaining balances on the app and earning returns on their investments, the lawsuit said. However, users couldn’t withdraw their investments or purported gains.

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