US Secret Service and Canadian Police Stop $4.3M Ethereum Scam

The US Secret Service, in coordination with Canadian authorities, has disrupted a $4.3 million Ethereum phishing scam under the operation known as “Operation Avalanche.”

The scheme, tied to a tactic called “approval phishing,” exploited Ethereum users by tricking them into unintentionally granting access to their digital wallets.

In response, US and Canadian agencies—including the British Columbia Securities Commission—launched a coordinated investigation involving law enforcement, securities regulators, crypto exchanges, and blockchain analytics firms.

Their joint effort led to the identification of compromised wallets, recovery of stolen funds, and timely warnings to affected users.

Special Agent in Charge Matt McCool of the US Secret Service said:

“The operation brought together multiple sectors in both the U.S. and Canada to safeguard individuals against fraudulent crypto activities.”

As crypto-related scams grow more sophisticated and borderless, this cross-border collaboration signals a critical step in combating global digital asset fraud.

Cracking Down on Approval Phishing Scams

At the heart of the scam was a tactic known as “approval phishing,” where bad actors deceive users into authorising fraudulent transactions.

Victims are lured into clicking misleading links or signing approvals that unknowingly grant attackers control over their wallets.

With access secured, scammers can quickly siphon off funds. As part of “Operation Avalanche,” the US Secret Service and Canadian authorities identified affected wallets and proactively notified users, urging them to take immediate steps to secure their assets.

This real-time intervention reflects a growing emphasis on user education and preventative action—an approach echoed globally, such as Australia’s recent shutdown of over 90 crypto-linked entities involved in similar schemes.

Bonnie Lysyk, Executive Vice President of Enforcement at the Ontario Securities Commission (OSC) noted:

“By identifying these wallets, we were able to warn victims before they lost any more funds.”

The OSC, in collaboration with other Canadian agencies, played a vital role in flagging compromised wallets and issuing alerts.

Tracking the Fight Against Digital Asset Crime

The success of Operation Avalanche underscores the growing importance of international collaboration in combating crypto-related fraud.

As digital asset markets continue to expand at an unprecedented pace, so too do the threats that target users and platforms alike.

In a separate incident, a recent breach involving the ZK token resulted in a $5 million loss from an administrator account—highlighting the persistent vulnerabilities in the space.

In response, the US Secret Service has intensified its efforts to protect users by combining advanced technology with global cooperation.

Just last month, the agency moved to dismantle domains tied to a Russian cryptocurrency exchange and freeze assets linked to illicit activity.

These actions reflect a broader strategy: safeguarding the financial ecosystem from increasingly sophisticated cyber threats.

McCool stated:

”As a result of these actions, it is important for us to unmask the criminals who take advantage of the victims and the financial systems. We will exercise constant cooperation with LOAs, both domestic and foreign, to prevent other frauds and recover the stolen funds for their owners.”

As crypto becomes more integrated into the global economy, could such coordinated crackdowns set a precedent for future security frameworks?