US and Canada collaborate to disrupt Ethereum blockchain “approval phishing” scam

U.S. Secret Service analysts collaborated with Canadian officials from British Columbia Securities Commission (BCSC) in Operation Avalanche to combat Ethereum blockchain “Approval phishing” scams. This initiative involved securities regulators, multiple Canadian police agencies, crypto trading platforms with the goal of finding compromised wallets on the Ethereum blockchain.

Participating platforms included Netcoins, Ndax, Coinbase, Wealthsimple, Shakepay, Kraken, and Coinsquare. The operation aimed to disrupt fraud and recover stolen assets, with an estimated $4.3 million drained from affected wallets.

“Approval phishing” is a scam in which victims are tricked into granting access to a crypto wallet on the Ethereum blockchain.  Once that approval is granted, the fraudster gains access and can withdraw funds without the owner’s knowledge. This is often part of a larger scam known as “pig butchering,” which involves the scammers gaining the trust of their potential victims and manipulating them into transferring funds to invest in fake cryptocurrency projects.

For their part, authorities have warned the owners of those compromised wallets who they have been victims of this type of scam. Also, victims of crypto scams are encouraged to report fraud to local law enforcement and relevant agencies.