BCSC disruption of overseas crypto fraud alerts nearly 100 Canadian victims
Classified in: Science and technology, Business
Note: Video and photos from Operation Avalanche available here.
, /CNW/ - The BC Securities Commission (BCSC) led a coordinated operation during Fraud Prevention Month to warn victims of crypto fraud that they may have lost ? or may soon lose ? some of their assets.
Operation Avalanche brought together securities regulators, police agencies, crypto trading platforms and a blockchain analysis firm on March 11 and 12 to:
During the operation, 89 victims were contacted by telephone or email. Through those interactions, participants in the Operation also gained information that could aid regulators and law enforcement in their investigative and disruptive efforts against online investment fraud.
WATCH: Video�of BCSC investigator alerting victims.
"Our traditional method of investigating, prosecuting and sanctioning won't work for these scammers, who are often organized crime groups operating in other countries, largely beyond our reach," said Lori Chambers, the BCSC's Deputy Director of Enforcement. "So we're finding new ways to disrupt their activity. One way is proactively alerting victims, often while the con is still unfolding ?�interrupting the scheme and preventing the bad actors from getting the stolen funds. Even if we don't catch the perpetrators, anything we can do to make their life harder is worthwhile."
Operation Avalanche focused on a specific tactic used by online fraudsters called "approval phishing," in which individuals are tricked into granting access to a wallet on the Ethereum blockchain. By granting approval, the victim ? often unknowingly ? allows the fraudster to withdraw crypto from their wallet.
The Ethereum blockchain shows which wallets have granted such permission. Although there can be legitimate reasons to grant access to a wallet, most of the time it's part of a long-term online investment fraud, often referred to as "pig butchering." The blockchain addresses identified during the operation were drained of crypto assets worth an estimated $4.3 million.
Chainalysis, a blockchain transactions analytics firm, uses sophisticated technology to identify compromised wallets and trace where the cryptos in those wallets originated. If Chainalysis determined that the cryptos for a compromised wallet came from one of the crypto trading platforms participating in Operation Avalanche, regulators notified that platform. The platform then provided contact information for the account holder to regulators and police sitting alongside them.
BCSC investigators plan to use the techniques they developed in Operation Avalanche to make this pro-active alerting of victims a regular part of their fight against online investment fraud.
Operation Avalanche ? which included the Alberta Securities Commission, the Autorit� des march�s financiers, the Ontario Securities Commission, the Delta Police Department, the Vancouver Police Department, the RCMP and the U.S. Secret Service ? is another example of how various agencies at the local, provincial, federal level, along with agencies in other countries, are collaborating to disrupt cryptocurrency scams orchestrated by transnational organized crime.
The participating crypto trading platforms, all of which are registered to operate in Canada, were:
Kraken and Coinsquare also provided information as part of the Operation.�
Members of the public are encouraged to visit�www.bcsc.bc.ca/OperationAvalanche�to learn more about crypto investment fraud, how to prevent becoming a victim, and what to do if you've already been victimized to avoid further losses.
The BCSC would like to thank the Ontario Provincial Police for their assistance.�
About the BC Securities Commission (www.bcsc.bc.ca)
The BC Securities Commission, an independent provincial government agency, strives to make the investment market benefit the public. We set rules, monitor compliance by industry, take action against misconduct, and provide guidance to investors and industry. As guardians of B.C.'s investment market, we're committed to maintaining a market that is honest, fair, competitive and dynamic, enabling British Columbians to thrive.
Learn how to protect yourself and become a more informed investor at www.investright.org
SOURCE British Columbia Securities Commission
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