Google files lawsuit against alleged crypto scammers

Google filed a complaint against a group of alleged scammers on Thursday.

The complaint, filed in the Southern District of New York, claims that the accused “conducted their version of the Fraud Scheme by socially engineering and conning victims into ‘investing’ in apps, available on Google Play and through other means, that purported to be cryptocurrency exchanges and other investment platforms.”

“Keeping people safe online is core to our business and we will not tolerate the misuse of our platforms to facilitate cryptocurrency scams. This litigation is a critical step in holding these bad actors accountable and sending a clear message that we will aggressively pursue those who seek to take advantage of our users,” Halimah DeLaine Prado, Google general counsel, told Blockworks in an email.

The complaint names Yunfeng Sun and Hongnam Cheung as well as their aliases Alphonse Sun, Zhang Hongnim and Stanford Fischer.

“Defendants created fraudulent apps that purported to be legitimate cryptocurrency exchanges and investment platforms, and made them available on Google Play,” Google said.

Sun and Chueng also 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 defendants would allegedly exchange texts with victims in an attempt to “persuade the victims to download and invest through one of their apps.” They also created marketing campaigns and videos.

However, the complaint claims that customers who made deposits on the apps couldn’t withdraw their funds. They then faced higher withdrawal fees to access funds, which would still not allow the victims to access their deposits.

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Google said that 87 apps have been linked to the scheme.

According to the suit, “Google records indicate that at least approximately 100,000 users have downloaded the Fraudulent Apps, including at least approximately 8,700 in the United States.”

It’s not clear, based on the complaint, how much money has been lost to the alleged fraud but Google says that the financial losses have been “substantial.”

The company seeks a permanent injunction to bar the defendants from accessing or using Google services and products, and “creating or maintaining” Google accounts. Google also wants the defendants to pay attorney fees and “reasonable costs.”

CNBC first reported the lawsuit.

Updated April 4, 2024 at 10:31 am ET: Added comment from Google.

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