More than 2,000 crypto wallets belonging to Australians have been compromised, according to the Australian Federal Police (AFP).
The AFP worked with U.S. blockchain data platform Chainalysis to target criminal cryptocurrency scammers.
A global investigation, known as Operation Spincaster, exposed criminals using a tactic known as “approval phishing.”
Since May 2021, scammers have used approval phishing to allegedly steal more than $4 billion (US$2.7 billion) in cryptocurrency globally.
The federal police agency said it has now been able to garner more intelligence on cryptocurrency scam tactics to protect Australians.
AFP Detective Superintendent Tim Stainton said cybercrime cannot be tackled by one country or agency alone.
“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.”
What is Approval Phishing?
Approval phishing involves deceiving victims into signing a malicious blockchain transaction that gives the scammer approval to spend tokens inside the victim’s wallet. Blockchain technology is a public ledger that most cryptocurrencies use to record transactions.“This method allows the criminal to drain the victim’s wallet of those tokens at will, which is similar to giving someone permission to transfer money from your online bank account.”
Australians Urged to Be Vigilant
More than 100 people from digital currency exchanges and public agencies from the United States, UK, Canada, Spain, Netherlands, and Australia took part in Operation Spincaster intelligence training between April and June 2024.Chainalysis shared intelligence on compromised wallets, provided training on tracing stolen funds, and provided guidance on detecting ongoing scam attempts in real-time.
The AFP said Australians need to remain vigilant about approval phishing and be sceptical of urgent requests for money or personal information. This is even the case if they appear to come from trusted sources.
Further, the AFP recommended that cryptocurrency users verify approval transactions before signing them. They also suggest not signing without fully trusting the person.
“Romance scammers, in particular, could profess love or strong emotions quickly to manipulate their targets emotionally. Be aware of these signs,” the AFP said.
“Always verify the identity of the person you’re communicating with online. Request video calls or meetings in person if possible.”
Meanwhile, Chainalysis Director of Investigations Phil Larratt said his firm was proud to work with Australian law enforcement agencies to help combat scams.
“The results of the operational sprints are enduring and create a positive impact in tackling a growing threat facing the community,” he 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.
Australians Lose Billions to Scams
Assistant Treasurer Stephen Jones recently told the National Press Club that in 2023, Australians lost $2.74 billion overall to scams, a 13 percent fall from 2022.However, scam losses on social media rose 17 percent in 2023.
Jones said it is a “big problem” that digital platforms allow scammers to use their networks to target victims.
He explained the government is working to prevent scams before they can inflict harm on the Australian population and that banks have taken measures that have led to a “meaningful uplift in consumer protection.”
“Confirmation of payee is to be rolled out across all banks, which will make a big difference,” he said.
He said slowing down or blocking transfers to high‑risk cryptocurrency exchanges has also significantly reduced losses.
