A big cryptocurrency scam has been uncovered by the Australian Federal Police, the AFP, revealing that over 2,000 crypto wallets owned by Australians have been compromised by international fraudsters.
Operation Spincaster
The AFP, in collaboration with blockchain analysis firm Chainalysis, has discovered that thousands of cryptocurrency wallets belonging to Australians have been infiltrated by scammers, putting millions of dollars’ worth of digital assets at risk.
The initiative is part of the global Operation Spincaster project, an international collaboration agains crypto scams.
Australia’s involvement in this operation began in June, when the Joint Policing Cybercrime Coordination Centre, the JPC3, led by the AFP, hosted a workshop in partnership with Chainalysis, various digital currency exchanges, government agencies, and international law enforcement bodies.
$162 million in losses
The investigation, spanning from April to June this year, saw participation from over 100 representatives from digital currency exchanges and public agencies across multiple countries including the US, UK, Canada, Spain, the Netherlands, and Australia.
The operation generated more than 7,000 leads, uncovering approximately $162 million in losses.
The primary focus of Operation Spincaster has been on approval phishing scams. In these scams, cybercriminals deceive victims into signing fraudulent blockchain transactions, which grants the scammers access to the victims’ crypto wallets.
This access allows the criminals to drain the wallets of specific tokens. The compromised wallets were connected to various cryptocurrency exchanges, though the specific names of these exchanges weren’t disclosed in the report.
Phishing scams everywhere
Experts warn that phishing scams continue to pose a huge threat in the cryptocurrency sector.
Scam Sniffer previously shared that over 260,000 people lost $314 million to phishing scams in just the first half of this year.
Since May 2021, approval phishing attacks have resulted in a giant $2.7 billion in losses.
In another related incident, Australian prosecutors are seeking jail time for a Crypto.com user involved in a misusing of funds.
In May 2021, an error by the crypto exchange led to a transfer of 10.47 million Australian dollars to Thevamanogari Manivel and Jatinder Singh instead of a 100 AUD refund. The mistake was due to an incorrect account number.
The couple spent part of the misappropriated funds before Crypto.com detected the error.
With about $4.9 million recovered, prosecutors are now pushing for a prison sentence for the individuals involved.
