U.S. secret service and Canadian authorities disrupt $4.3M Ethereum phishing scam

A phishing scam targeting Ethereum clients was shut down by the U.S. Secret Service and Canadian police in a coordinated sting. The thieves were able to steal over $4.3 million before apprehension.

The joint effort was called “Operation Avalanche.” It was created to trace the stolen money, freeze online wallets, and alert victims before they lost more money.

To this end, the U.S. Secret Service cooperated with principal Canadian stakeholders, including the British Columbia Securities Commission (BCSC), Ontario Securities Commission (OSC), Alberta Securities Commission, and the Royal Canadian Mounted Police (RCMP) to develop a harmonized response and implementation strategy. Digital forensics experts, crypto exchanges, and blockchain experts supported them.

“This operation united multiple entities from two countries to combat cybercrime,” Special Agent Matt McCool of the U.S. Secret Service said.

Authorities act swiftly to stop ‘approval phishing’ scam

The scam was a variant of a scheme called “approval phishing.” It deceives victims into allowing unknown third parties access to their crypto wallets.

This scam begins when someone clicks a fake link, believing it is safe. But they unknowingly confirm a transaction in their crypto wallet when they click it. That means the scammer has complete access to their digital wallet. Instead of requesting a password, fraudsters use this deception to take over control of the wallet and thus gain the ability to empty it of crypto.

Using blockchain analysis, investigators identified wallets that had already been compromised. They acted quickly, reaching out to affected users to warn them before more losses occurred. Victims were instructed to revoke unauthorized permissions, and stronger security protocols were put in place to prevent further damage.

Bonnie Lysyk, executive vice president of enforcement at the Ontario Securities Commission, said in a statement that they could warn victims before they lost everything by identifying the compromised wallets early.

This method of phishing has become common. Crypto users worldwide are falling for it, including recent victims in Australia, where over 90 companies involved in crypto scams were recently shut down.

Global agencies join forces to fight crypto fraud

Operation Avalanche is part of a wider effort to stop the rising number of crypto scams. As more people use cryptocurrencies like Ethereum and Bitcoin, more criminals find ways to exploit them.

The U.S. Secret Service has been expanding its cyber investigation mission. In the last month, it worked to shut down sites affiliated with a Russian cryptocurrency exchange that had been involved in criminal activity.

As part of their fight against crypto crime, the Secret Service and Canadian authorities are also working to educate the public. They advise all Ethereum users to regularly check wallet permissions using tools like Revoke.cash or Etherscan’s Token Approval Checker.

The agencies have not yet disclosed the identities or nationalities of the suspects, citing an active investigation. However, both U.S. and Canadian officials have issued advisories urging crypto users to verify links, use official wallet apps, and avoid engaging with unsolicited crypto offers.

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