The U.S. Secret Service, alongside Canadian authorities, has successfully disrupted a major Ethereum phishing scam that led to losses of $4.3 million.
The operation, known as “Operation Avalanche,” targeted Ethereum users who fell victim to a scheme known as “approval phishing.” This coordinated effort aimed to track down stolen funds and prevent further damage to digital wallets.
US Secret Service Stops $4.3M Ethereum Phishing Attack
According to a press release, the U.S. Secret Service worked with several Canadian agencies, including the British Columbia Securities Commission (BCSC), to combat this scam. The operation involved collaboration between securities regulators, police, crypto trading platforms, and blockchain analysis firms.
This multi-agency effort aimed to locate compromised digital wallets on the Ethereum blockchain, warn affected wallet holders, and prevent further losses.
“The operation brought together multiple sectors in both the U.S. and Canada to safeguard individuals against fraudulent crypto activities,” said Special Agent in Charge Matt McCool of the U.S. Secret Service. This partnership is crucial in addressing the growing threat of crypto fraud, like the recent Indian crackdown, which has been increasingly difficult to tackle due to its borderless nature.
Tackling the ‘Approval Phishing’ Scam
The primary method used in the scam was “approval phishing,” where fraudsters trick victims into approving transactions on their wallets. In this scheme, victims unknowingly grant access to their funds by clicking on a deceptive link or approving a fraudulent transaction. Once access is granted, the attackers could withdraw funds from the compromised wallet.
During the US Secret Service operation, authorities identified and reached out to victims affected by this crypto scam. They informed the victims of the risk, urging them to take necessary actions to secure their wallets. This approach is part of a broader effort to educate crypto users and prevent future attacks like the recent move by Australia to shut down over 90 companies related to such attacks.
“By identifying these wallets, we were able to warn victims before they lost any more funds,” said Bonnie Lysyk, Executive Vice President of Enforcement at the Ontario Securities Commission (OSC). The OSC, alongside other Canadian authorities, played a critical role in identifying the compromised wallets and alerting users in real-time.
Ongoing Efforts to Combat Crypto Fraud
Amid the success of Operation Avalanche, the necessity of international cooperation in the fight against crypto fraud was proven. Just as the market is expanding at blinding speed, the threats of fraud in the sector also increase. In addition to the success of Operation Avalanche, another recent crypto security breach, which involved the ZK token, led to the loss of $5 million belonging to one of the admin accounts.
Amid these moves, the US Secret Service has been taking measures to safeguard users by leveraging technology and cooperation to mitigate criminal activities in cryptospace.
Last month, the U.S. Secret Service also attempted to shut down website domains associated with a Russian cryptocurrency exchange and block assets related to illegitimate use. Such operations are a clear indication of the Secret Service’s desire and attempt to protect the country’s financial sector.
”As a result of these actions, it is important for us to unmask the criminals who take advantage of the victims and the financial systems,” said McCool. “We will exercise constant cooperation with LOAs, both domestic and foreign, to prevent other frauds and recover the stolen funds for their owners.”
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