Google has taken legal action against a group of individuals accused of running a sophisticated crypto scam, like CNBC. reports exclusively today. The lawsuit, filed Thursday in the Southern District of New York, targets Yunfeng Sun, also known as Alphonse Sun, and Hongnam Cheung, alternatively known as Zhang Hongnim or Stanford Fischer, along with their associates. This lawsuit represents Google's pioneering effort among technology companies to judicially address the threat of crypto fraudaimed at setting a precedent for user protection on digital platforms.
Google takes action against crypto fraudsters
Apparently operational since at least 2019, the defendants are accused of creating and distributing more than 87 counterfeit apps through Google Play, deceiving more than 100,000 users worldwide. The apps, pretending to be legitimate cryptocurrency investment and trading platforms, served as a conduit for widespread deception, employing tactics including, but not limited to, deceptive text message campaigns via Google Voice , promotional efforts on Youtube and other media, as well as affiliate marketing strategies to trap victims.
Google General Counsel Halimah DeLaine Prado, in an exclusive interview with CNBC Crypto World, explained the seriousness of the situation, highlighting the loss of over $1 billion to cryptocurrency fraud and scams alone. 'in the United States in 2023. Prado highlighted the litigation not only as a defensive but also a deterrent measure:
This is a unique opportunity for us to use our resources to actually combat bad actors…not only to use our resources to protect users, but also to set a precedent for future bad actors that we do not tolerate not this behavior.
The fraudsters' modus operandi was to pass the fraudulent apps off as legitimate by displaying fictitious balances and investment returns, coupled with strategies initially allowing minor withdrawals to build trust. Victims, lured under the guise of profitable investment opportunities, found themselves unable to recoup their investments or promised returns, and were often defrauded into additional payments under the guise of withdrawal fees or minimum balance requirements.
One particularly egregious example cited in the lawsuit was the TionRT app, allegedly a crypto exchange platform uploaded to Play in 2022 by an account linked to Sun. Scammers used various communication platforms to lure victims with promises of financial gain, then leaving them with nothing to do when withdrawal attempts were made.
Google's response to this scam was multifaceted, involving not only removing malicious apps as soon as they were discovered, but also deploying a dedicated cybersecurity team to proactively identify and neutralize threats across its services .
The company's lawsuit seeks damages in excess of $75,000, attributed to investigation expenses and resources assigned to maintaining the security and integrity of the platform. Additionally, Google is seeking a permanent injunction to now prohibit the defendants and their associates from creating Google accounts or accessing its services.
At press time, leading cryptocurrency Bitcoin was trading at $66,752.
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