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Feds: App Secretly Hijacked Phones to Mine Digital Money

Sergey Nivens/Shutterstock.com

A smartphone app secretly hijacked its users' devices to mine for digital currencies for its developer, federal and state regulators alleged Monday.

The process drained batteries and used up mobile data, potentially causing users to incur fees by going over their monthly data limits, the Federal Trade Commission and the New Jersey Attorney General's office said.

The "Prized" app advertised that consumers could earn points playing games that they could then use on rewards, such as clothes or gift cards. The company also promised it was free from any malware or viruses, according to the government's complaint.

But instead, the app took control of the user's computing power to secretly mine for virtual currencies, including DogeCoin, LiteCoin, and QuarkCoin, the regulators said. The government's complaint doesn't mention Bitcoin, the most popular virtual currency. People can "mine" for virtual currencies by solving complex mathematical equations.

By tricking users into downloading the app, the developers were able to enrich themselves by hijacking consumers' devices, the regulators allege.

Ryan Ramminger, the CEO of Equiliv Investments, which created the Prized app, agreed to settle the charges with the FTC and New Jersey Attorney General. The firm will be barred from creating any malware in the future and will have to pay $50,000 to the state of New Jersey.

"Hijacking consumers' mobile devices with malware to mine virtual currency isn't just deplorable; it's also illegal," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "These scammers are now prohibited from trying such a scheme again."

(Image via Sergey Nivens/ Shutterstock.com)

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