Chainalysis Launches Operation Spincaster to Fight $2.7 Billion Crypto Fraud – DL News

• Chainalysis works with law enforcement to combat cryptocurrency fraud.
• Between April and June, Operation Spincaster generated 7,000 hits.
• The leads were used to close accounts, seize funds and gather intelligence.

Blockchain data company Chainalysis in a blog post revealed Operation Spincaster, an international initiative created to combat “endorsement phishing” scams, which have defrauded victims of $2.7 billion in cryptocurrency since May 2021.

Phishing endorsement is a tactic used by criminals to steal funds through various scam techniques, including fake cryptocurrency apps and romance scams, also known as “slaughtered pigs.”

Operation Spincaster is a global extension of an operational sprint Chainalysis conducted with the Calgary Police Service, called Operation interruptionin March.

Sergeant Danny Leong of the Calgary Police Service’s blockchain investigations team said his organization partnered with Chainalysis in a workshop that brought together several Canadian law enforcement agencies and cryptocurrency companies to address cryptocurrency-related crime.

They “identified more than 770 individuals, 119 of whom were Canadian, as victims of cryptocurrency fraud, with an estimated total loss of $59 million,” it said, adding that participants acted quickly to notify victims and prevent further losses.

Since then, Operation Spincaster has evolved into a series of operational sprints between April and June, designed to disrupt and prevent scams through public-private collaboration.

The transparency of blockchain coupled with advanced analytics offers numerous opportunities for investigation, asset recovery and crime prevention, Chainalysis said.

Chainalysis proactively identified thousands of compromised wallets, which formed the basis of a series of operations across six countries (US, UK, Canada, Spain, Netherlands, and Australia) with over 100 participants, including 12 public sector agencies and 17 cryptocurrency exchanges.

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Leads have been followed up

Over 7,000 leads were distributed, involving approximately $162 million in losses. The leads were used to close accounts, seize funds, and create intelligence to prevent future scams.

Preventing scams requires an ecosystem-wide strategy that brings together the public, private and civil society sectors through a three-pronged approach, including public education and user outreach, proactive transaction monitoring for exchanges, and law enforcement capacity building, the blog post reads.

Chainalysis said it plans to expand the Spincaster operation to other countries in the coming months.

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