Australian Federal Police Investigates as Phishing Scams Hit 2000 Crypto Wallets

Chainalysis recently launched Operation Spincaster, an initiative to tackle the problem of crypto scams. The initiative found that approval phishing scams had hit over 2,000 crypto wallets in Australia.

Following this discovery, the Australian Federal Police (AFP) jumped into action to investigate these losses. The AFP superintendent, Tim Stainton, emphasized that the results obtained during Operation Spincaster have revealed the new cybercrime tactics.

Operation Spincaster Uncovers Major Crypto Phishing Scam

Due to the high increase in crypto wallet scams in Australia, Chainalysis conducted Operation Spincaster to investigate these scams. The operation focused on combating approval phishing scams by providing education, tools, and necessary training.

The operation shed light on the increased incidence of approval scams, a new tactic scammers employ to steal user funds. Notably, the criminals involved in approval phishing mislead users into authorizing a malicious transaction. Through this means, victims have enabled the scammers to transfer their tokens to another wallet address.

These scammers target victims through investment schemes that offer unrealistic returns or romance scams, popularly called pig-butchering.

Unfortunately, victims have collectively lost approximately $4 billion to approval phishing scams since May 2021. Also, Australia's competition and consumer regulator reports that investment scams caused a loss of about $840 million in Australia in 2023.

Chainalysis collaborates with the Australian Federal Police's Policing Cybercrime Coordination Center (PCCC) in ongoing investigations. This partnership started after the PCCC staff organized a workshop to explore Operation Spincaster and learn how to enhance security for Australians.

Further, Chainalysis provided the police with insights into compromised wallets and trained them on recovering stolen funds. The firm also offered guidance on how to identify active scam attempts and showed them how to contact and assist victims of approved phishing victims.

According to the Australian Federal Police, cryptocurrency exchanges like BTC Markets, Binance, Ebonex, Independent Reserve, OKX, SwyftX, Crypto.com, and Wayex have joined in protecting Australians from these scams.

Moreover, Australian banks have also been proactive against cryptocurrency scams for the past 12 to 14 months. They restrict or prevent transactions involving transfers to cryptocurrency exchanges.

The Big 4" banks, namely National Australia Bank, Commonwealth Bank, Australia and New Zealand Banking Group, and Westpac, are also active against these scams. Recently, the HSBC bank has become proactive against these crimes.

Results from The Chainalysis Operation Spincaster

Findings from Chainalysis' Operation Spincaster show that approval phishing scams have caused about $2.7 billion in losses in crypto assets since May 2021. According to Chainalysis, Spincaster was an international extension of an initiative carried out with Calgary police in Canada in March 2024.

Over seven thousand (7,000) leads were identified as connected with criminals during the operations. Chainalysis traced these funds to the criminal-linked accounts and retrieved them.

During the operation, the firm gathered the required intelligence to detect and prevent such scams in the future.

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