Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
$4.3M in Crypto Scams Triggers Operation Avalanche
Fraud Prevention | April 17, 2025
Image: Freepik
Crypto Phishing Scam Triggers Coordinated Crackdown, Authorities Contact 89 Canadians
On March 11-12, 2025, Canadian regulators led by the British Columbia Securities Commission (BCSC) and federal police coordinated a large scale effort that warned 89 crypto investors about a sophisticated scam that has already drained over $4.3 million in digital assets.
The operation, named Operation Avalanche, focused on a phishing technique that compromises users' Ethereum wallets and allows scammers to extract funds without them realizing what's happening to them.
See: BCSC Fines Fraudulent Crypto Platform ezBtc $18 Million
Operation Highlights
- $4.3 million was confirmed lost, all linked to wallet approval fraud
- 89 victims were identified and contacted by phone or email
- 7 regulatory and law enforcement agencies were involved
- 7 Canadian-registered crypto platforms supported the operation
- March 11–12, 2025 were coordinated national action days
What Is Operation Avalanche?
Led by the BCSC, Operation Avalanche was a 2 day joint initiative involving multiple provincial regulators, federal law enforcement, and crypto trading platforms. The primary objective was to track fraudulent activity on the Ethereum blockchain, identify affected wallets, and proactively alert Canadians before their funds were stolen.
The Ontario Securities Commission (OSC), Alberta Securities Commission (ASC), and Quebec’s Autorité des marchés financiers (AMF) all participated in the effort, alongside the Royal Canadian Mounted Police (RCMP), Vancouver Police, Delta Police, and the U.S. Secret Service.
See: Anatomy of Rising Deepfake Scams in Crypto and Fintech
Blockchain forensics firm, Chainalysis, provided technical support to locate and analyze all compromised wallet activity.
A total of 7 registered crypto platforms participated in the fraud prevention effort, including Netcoins, NDAX, Coinbase Canada, Wealthsimple, Shakepay who helped verify wallet ownership and victim outreach. Additionally, Kraken and Coinsquare both provided data support.
How the Scam Works
The scam uses a technique called 'approval phishing' where victims are duped into granting scammers permission to access their crypto wallets by clicking fake approval requests that look like they come from legitimate platforms. These scam links are usually sent from fraudulent websites, spoofed emails, or fake pop-ups.
Once the wallet owner grants approval, the scammer can transfer assets out of the wallet without needing login credentials or seed phrases. Most victims are unaware that this could happen until it's too late.
Tracking and Warning the Victims
The crackdown team used blockchain analytics tools to scan Ethereum for wallet addresses with suspicious approval activity. Then, they were able to link many of these wallets to real individuals with the cooperation of crypto trading platforms.
See: Can Cloned Voices Crack Bank Security? Need to Know
In total, 89 wallet holders were identified and contacted directly, warning them that their wallets were compromised or at high risk. This proactive early warning allowed some victims to revoke access or move their funds before more damage was done.
Bonnie Lysyk, EVP Enforcement at the OSC:
“Proactive and innovative approaches are crucial in disrupting fraud. By staying ahead of emerging threats and leveraging advanced technologies, we can protect investors and maintain the integrity of our financial markets.”
What to Do If You’re at Risk
If you believe they may have clicked a suspicious approval link or noticed strange transactions you should act quickly by taking key steps:
See: Canada Launches First Spot Solana ETFs With Staking
- Revoke wallet approvals using tools like Revoke.cash or Etherscan’s Token Approval Checker
- Change passwords and enable two-factor authentication (2FA) on crypto platforms
- Report the fraud to the Canadian Anti-Fraud Centre and your local regulator
- Be cautious of services claiming to retrieve lost or stolen crypto for a fee
Conclusion
Great to see the coordination among key enforcement and operational stakeholders, the 'action' and impact speaks volumes. Learn more about Operation Avalanche and more information about how to protect yourself from phishing approval scams.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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