More than 2,000 compromised cryptocurrency wallets have been identified as belonging to Australians who have fallen victim to scams.
The Australian Federal Police (AFP) has been working with US blockchain data platform Chainalysis to crack down on crypto scammers targeting Australians.
As part of this global investigation, more than 2,000 compromised crypto wallets belonging to Australians were identified, with these victims tricked into handing over control of their cryptocurrency to the criminals.
“Working together and sharing knowledge with industry, government and law enforcement partners is crucial,” said AFP Detective Superintendent Tim Stainton.
“The intelligence we have gathered collaboratively throughout Operation Spincaster has shed a clear light on new tactics being used by cybercriminals in their continued efforts to defraud Australians.
“It will form a key part of our ongoing investigations to identify cybercrime victims and disrupt offenders in Australia.”
According to the AFP, these scammers are commonly using a tactic dubbed “approval phishing”, where victims are tricked into signing off on a malicious blockchain transaction.
Once they sign it, the criminal is then given access to the victim’s wallet and can spend the crypto stored in it, effectively allowing them to steal the victim’s money.
According to Chainalysis, this tactic has been used to steal $4 billion in cryptocurrency around the world since May 2021.
There has also been an uptick in investment scams, where victims are offered high returns on crypto investments, as well as romance scams, where scammers pretend to enter into a romantic relationship to steal money from an unsuspecting victim.
Tackling crypto scammers
Chainalysis has increasingly been working with law enforcement authorities this year to disrupt crypto scammers.
It held training sessions with digital currency exchanges and public agencies from the US, UK, Canada, Spain, Netherlands and Australia between April and June, involving the sharing of intelligence about compromised wallets, training on how to trace stolen funds, guidance on detecting ongoing scam attempts in real time and efforts to support victims.
“The results of the operational sprints are enduring and create a positive impact in tackling a growing threat facing the community,” Chainalysis director of investigations Phil Larratt said.
“There is still much to do in this relentless fight against scams, but proactive initiatives such as Operation Spincaster, where we bring together key stakeholders across the ecosystem as a collective, are a pivotal step in disrupting the global scam epidemic.
“We look forward to the continued success of these sprints and playing our part in enabling agencies in Australia and across the globe with the tools and expertise on this journey.”
The AFP recommended that Australians with crypto wallets make sure they verify approval transactions before signing them, be sceptical of urgent requests for money even if they appear legitimate, research the person or company’s background, and report suspicious behaviour.
Last month a study found that having an economic advantage doesn’t necessarily guarantee protection from crypto scams like these, with wealthy Australians often demonstrating an “over-confidence” that sees them fall victim to these tricks.
An Australian man recently escaped a jail sentence over his promotion of a crypto Ponzi scheme, after he pleaded guilty to one charge of providing financial services without a licence.
