AFP Uncovers 2,000 Compromised Australian Crypto Wallets

The Australian Federal Police (AFP) has uncovered that over 2,000 cryptocurrency wallets owned by locals were compromised by offshore scammers, putting millions of dollars in digital assets at risk.

This discovery emerged from Operation Spincaster, a global initiative against crypto fraud spearheaded by Chainalysis and locally managed by the AFP-led Joint Policing Cybercrime Coordination Centre (JPC3).

Operation Spincaster Uncovers $162M

Australia’s involvement in Operation Spincaster began in June 2024, with the JPC3 hosting a workshop in collaboration with Chainalysis, digital currency exchanges, government bodies, and law enforcement agencies.

Between April and June 2024, over 100 participants from digital currency exchanges and public agencies across the US, UK, Canada, Spain, the Netherlands, and Australia were involved, which highlights the global scope of these cyber fraud schemes. The investigation generated over 7,000 leads, uncovering around $162 million in losses.

Operation Spincaster’s primary focus was on ‘approval phishing’ scams. In these scams, cybercriminals trick victims into signing fraudulent blockchain transactions, granting them access to the victims’ crypto wallets. This access allows criminals to deplete the wallets of specific tokens.

In Australia, the JPC3 was key in advancing the investigation into these crypto thefts. According to the Australian Federal Police, the operation has been vital in identifying strategies to counteract the ongoing threat of cybercrime, identify criminals, and disrupt the activities of offenders within Australia.

Meanwhile, the report indicated that the compromised digital wallets were linked to various crypto exchanges, though specific names were not revealed.

Phishing Scams on the Rise

Experts warn that phishing scams remain a significant threat in the crypto realm. According to Scam Sniffer, over 260,000 individuals lost $314 million to phishing scams in the first half of this year alone. Since May 2021, approval phishing attacks have resulted in $2.7 billion in losses.

In a separate development, Australian prosecutors are seeking jail time for a Crypto.com user involved in a significant misappropriation of funds. In May 2021, a mishap on the crypto exchange’s part led to an erroneous transfer of 10.47 million Australian dollars (approximately $6.86 million) to Thevamanogari Manivel and Jatinder Singh instead of a 100 AUD refund. The error was traced back to a misentered account number.

The couple involved had spent a portion of the misappropriated funds before Crypto.com identified the error. With approximately $4.9 million recovered, prosecutors are now pushing for a prison sentence.