The BCSC led Operation Avalanche, disrupting an international crypto fraud involving 89 victims. Victims were alerted about compromised Ethereum wallets as scammers operated overseas. The operation targeted “approval phishing,” which resulted in the loss of approximately $4.3 million in crypto assets. BCSC plans to use insights from this operation for ongoing victim alert systems.
The British Columbia Securities Commission (BCSC) led a multi-agency initiative named Operation Avalanche to combat an international cryptocurrency fraud scheme. Conducted on March 11 and 12, this operation involved collaboration among Canadian securities regulators and law enforcement to identify compromised Ethereum blockchain wallets belonging to 89 victims. Victims were reached through phone or email to inform them of potential threats and aid in preventing further financial losses.
Due to the perpetrators operating from outside Canada, local law enforcement could not apprehend them. BCSC’s deputy director of enforcement, Lori Chambers, expressed that although apprehending perpetrators is challenging, their efforts to disrupt the fraud by notifying victims are valuable. Specific details regarding the fraudsters’ location were not disclosed.
The focus of Operation Avalanche was on “approval phishing,” a method where victims unknowingly grant access to their Ethereum wallets, thereby allowing fraudsters to withdraw their cryptocurrency. The Ethereum blockchain provides transparency regarding wallet permissions, but, while some permissions may be legitimate, they are frequently exploited in fraudulent schemes. As a result, approximately $4.3 million worth of crypto assets were drained from the identified wallets.
Moving forward, the BCSC intends to leverage the techniques developed during Operation Avalanche to routinely alert potential fraud victims, enhancing proactive fraud prevention efforts in the future.
