U.S. and Canadian authorities disrupt $4.3m crypto phishing scam

The U.S. Secret Service teamed up with Canadian authorities in a cross-border crackdown on a sophisticated crypto scam that drained $4.3 million from victims’ Ethereum wallets.

The operation, dubbed “Operation Avalanche,” involved regulators, law enforcement, and crypto platforms working to identify compromised wallets and warn potential victims.

At the heart of the scam is a tactic known as “approval phishing,” where victims unknowingly authorize fraudsters to access their crypto wallets. 

Once access is granted, scammers can withdraw funds — in this case, Ethereum (ETH) — directly without further interaction. The scam is often linked to “pig butchering,” a social engineering scheme in which victims are manipulated into investing in fake crypto projects.

The U.S. Secret Service’s Washington Field Office provided blockchain forensic support to Canadian officials.

“Our analysts helped disrupt this scheme and prevent bad actors from receiving stolen funds,” said Special Agent in Charge Matt McCool.

Enforcement agencies coming together 

Operation Avalanche brought together multiple Canadian agencies, including the BC Securities Commission, Ontario Provincial Police, Alberta Securities Commission, and the Royal Canadian Mounted Police, as well as several local police departments and securities regulators.

The operation highlights how law enforcement agencies are adapting to combat crypto-enabled fraud by combining traditional investigative work with blockchain analysis. 

It also underscores the growing cooperation between U.S. and Canadian authorities in tackling crimes involving digital assets.

Authorities are continuing efforts to identify more compromised wallets and return seized assets to victims.