Cryptocurrency News: More than 170 mobile apps in the Android ecosystem have been identified as scam services designed to deceive those considering entering the cryptocurrency industry.
Lookout researchers said this week that apps, 25 of which are hosted on Google Play, are defrauding people interested in cryptocurrencies by offering cloud-based mining services.
For a fee, these mobile apps promise to mine cryptocurrencies on behalf of subscribers.
What is cryptocurrency mining?
Cryptocurrency mining is a process that leverages the computing power of a personal device or rental system to solve computational and cryptographic puzzles.
The power required for many types of cryptocurrencies is now more than a personal computer can handle. This means that individuals can join mining pools and share work and revenues.
Lookout analyzed every single cryptocurrency mining app that appeared on the firm’s radar and found that not a single one was mining any legitimate cloud-based cryptocurrency. In other words, users are paying for a service that doesn’t exist.
Both categories are deceiving people
There are two main categories of scam apps included in these schemes, classified by researchers as “BitScams” and “CloudScams”.
CloudScams offers mining options using cloud computing power, and it’s common for developers to create realistic looking mining services to look legitimate. BitScams are mobile apps that offer users additional “virtual hardware” – for prices between $12.99 – $259.99 – and promise additional mining returns.
Payments can be made via Google Play or with Bitcoin (BTC) and Ethereum (ETH) d transfers to developers’ wallets.
Both types use similar business models, but there are groups that appear to be competing forces behind the apps.
More than 93 thousand people were trapped
According to the company, more than 93,000 people have been scammed this way. Based on the average ‘subscription’ price and install rates demanded by the apps, an estimated $350,000 or more was lost, with users paying for fake apps and upgrades.
“What keeps BitScam and CloudScam apps under the radar is that they don’t actually do anything malicious. In fact, they do almost nothing. It’s just used to raise money for services that don’t exist.
After this news, Google quickly removed the offending apps hosted on Google Play. The company has no way of deleting Android apps hosted on third-party websites, and so users should be wary if apps promise returns that are too good to be true.