Amid the rapid development of digital currencies, the Chinese Ministry of Industry and Information Technology (MIIT) has issued a stark warning regarding the proliferation of counterfeit digital yuan applications. These fraudulent apps, masquerading as legitimate platforms for China’s central bank digital currency (CBDC), aim to deceive users and potentially compromise their financial security.
The MIIT’s alert underscores the escalating threat posed by digital currency scams and emphasizes the importance of vigilance among consumers in safeguarding against such fraudulent schemes. The emergence of these fake digital yuan apps raises concerns about the integrity of China’s digital currency ecosystem and highlights the need for robust measures to combat cyber fraud.
Digital Yuan App scam exposed
The Chinese government has warned users about the ‘Digital Yuan Test Version,’ which aims to swindle participants in an extended central bank digital currency (CBDC) testing.
A fake digit yuan app has been discovered, according to a WeChat post attributed to China’s Ministry of Industry and Information Technology. The Trojan Horse download is similar to the official version. However, minor variations can be found.
The counterfeit app, called “Digital Yuan Test Version,” features a logo similar to the legitimate app but a slightly altered user interface.
According to the Chinese government, the logo, user interface, and slogans are similar to those found in the original Shuzi Renminbi app. However, the Trojan Horse program uses a different package name, version number, and message digest algorithm (MD5). The package name of the actual e-CNY app is cn.gov.pbc.dcep, whereas the fake app is com.ecny.ecny2.
The Ministry of Industry and Information Technology’s warning about the fake digital yuan app. Source: WeChat
The fake program has the characteristics of a popular crypto scam in which users are given dividends for sharing the software. As the Chinese government strengthens its currency’s authority, these scams become increasingly prevalent. In January, a Chinese court issued the first e-CNY money laundering verdict.
Digital Yuan faces major hurdles
At this point, it is unknown whose operating systems hosted the fake program; Chinese law enforcement may request that Apple delete an app from the program Store if it is illegal or includes illegal information. Google, the maker of Android, stated that it “carefully evaluates every request to take down content.” Parties who want their content removed frequently present legal paperwork to back up their request.
The People’s Bank of China published its official Shuzi Renminbi app in 2022. The app includes several digital wallets for transferring funds from their bank accounts. Tap-to-pay is the same as withdrawing money from a bank ATM.
The growing adoption of the e-CNY fiat currency shows that China may dominate global trade. Given the recent exchange of CBDCs between the UAE and China, the e-CNY may be eligible for participation in trade agreements. The action was one of the first steps toward developing a new CBDC blockchain infrastructure that connects different central banks.
This is not the first reported bogus digital yuan app. Similar schemes were discovered in 2021 and 2022. Former People’s Bank of China Governor Zhou Xiaochuan stated at the 2023 China (Beijing) Digital Finance Forum on Oct. 13 that as technology and convenience improve, the cost of abuse will decrease.
This trend “should be paid great attention to in the development of digital currency,” Zhou said.
Despite its strict anti-crypto legislation, China has seen some high-profile crypto-related crimes. Rogue foreign exchange traders used cryptocurrencies to export funds from China in a $2.2 billion scheme discovered in December.
