Google filed a lawsuit against two application developers from China at the beginning of last week, alleging that they created fraudulent applications for investing in cryptocurrencies and published them on the Google Play store.
The lawsuit targets Yunfan Song (also known as Alfons Song) and Hongs Cheng (also known as Zhang Honnim and Stanford Fisher) from Shenzhen and Hong Kong, respectively. The developers are accused of developing 87 fraudulent applications between 2014 and 2019. These applications, which claimed to be cryptocurrency exchange platforms or investment opportunities, promised significant profits but were ultimately fraudulent, resulting in losses for at least 100,000 people worldwide.
In the lawsuit filed in the southern district of New York, Google alleges that victims invested real money in the fraudulent applications but were unable to withdraw their funds. The court documents describe how Sun and Cheng prohibited victims from withdrawing funds and sometimes required additional deposits for various services, ultimately leading to losses ranging from several thousand to $75,000.
The defendants engaged in marketing campaigns to promote their fraudulent applications, including hiring actors to create videos claiming the applications were safe and profitable. Google accuses Song and Chang of abusing various Google services, such as the Play Store, Google Voice, Google Workspace, Gmail, and YouTube, to distribute the fraudulent applications.
Khalim Delein Preedo, Google’s Legal Director, stated that this legal action marks the first time a technology company has taken legal action against cryptocurrency scammers. Preedo highlighted that around 100,000 Google users, including 8,700 in the United States, suffered losses due to the defendants’ actions.
Google has incurred losses exceeding $75,000 related to investigating the defendants’ activities and ensuring platform security. The company’s decisive response to investment fraud reflects the growing prevalence of cybercrimes involving cryptocurrency scams, surpassing losses from extortion attacks.
Last year, the FBI issued a warning about the rise in fraudulent attacks leveraging cryptocurrencies and investment schemes. Many of these attacks were cited as evidence in Google’s lawsuit against Song and Chang, underscoring the urgency of addressing fraudulent activities in the crypto space.