Cryptocurrency accounts tied to $162 million in losses have been shut down by investigators in a newly disclosed public-private initiative known as Operation Spincaster. Led by Chainalysis, the project has conducted operational sprints in six countries, including the US, the UK, Canada, Spain, the Netherlands, and Australia.
The initiative involved 100 partners, including public sector agencies and crypto exchanges, with the aim of combating cryptocurrency scams. Chainalysis, a cryptocurrency transaction research firm, utilized its Crypto Investigations solution to identify thousands of compromised crypto wallets, leading to the discovery of over 7000 leads related to approximately $162 million in losses.
Approval phishing, a common tactic used by criminals to steal funds through various scamming techniques, was highlighted as a significant threat. This technique involves tricking victims into signing malicious blockchain transactions that authorize scammers to access specific tokens in their wallets, resulting in substantial losses. Chainalysis reported that over $2.7 billion has been lost to scams utilizing approval phishing since May 2021.
Operation Spincaster’s UK sprint identified over 230 victims and uncovered at least £33 million in funds believed to be the result of approval phishing. The initiative was praised for its groundbreaking collaboration between domestic exchanges, technology research units, and investigators, emphasizing the importance of public-private sector cooperation in addressing evolving challenges in the Web3 landscape.
Operation Spincaster was built upon the success of Operation Disruption, a previous operational sprint conducted with the Calgary Police Service in March 2024. This initial operation led to the identification of over 770 individuals, including 119 Canadians, as victims of cryptocurrency fraud, with an estimated combined loss of $59 million. The collaborative effort between law enforcement agencies, technology providers, and researchers has proven effective in combating cryptocurrency scams and protecting the public from financial harm.
Moving forward, agencies like the National Crime Agency (NCA) will continue to support ongoing investigations to ensure the safety of individuals and hold offenders accountable. Public-private sector partnerships like Operation Spincaster are essential in addressing the complex challenges posed by cryptocurrency scams and money laundering activities.