Anti-Fraud Program Reveals New Phishing Tactics

Operation Spincaster, an initiative designed to tackle scammers employing phishing tactics to steal cryptocurrencies, has revealed new fraudulent schemes targeting crypto users. These include tactics involving counterfeit professors and what are known as “overlay attacks.”

Chainalysis, a prominent provider of blockchain analytics, disclosed the findings of Operation Spincaster, which focuses on countering fraudsters who utilize phishing to misappropriate cryptocurrencies. During this operation, analysts uncovered various schemes aimed at deceiving users and misappropriating their assets.

Launched in April 2024, Operation Spincaster is a global extension of a project initially conducted with the Calgary Police Service in Canada in March 2024. The operation engaged six countries, 12 government agencies, and 17 cryptocurrency exchanges worldwide.

Through this international collaboration, Chainalysis analysts tracked over 7,000 online traces linked to criminals, monitored fund movements, closed accounts associated with scammers, seized assets, and collected data to avert future frauds.

As a result of Chainalysis’ initiatives, several new fraudulent schemes were detected. Notably, the Washington State Department of Financial Institutions (DFI) issued warnings regarding scams involving counterfeit professors who masquerade as experts in crypto and blockchain. Scammers fabricate fake profiles of these professors on social media and professional networks like LinkedIn. These schemes often employ an “academy” or “business school” platform that promises investors substantial loans or lines of credit to fulfill the capital requirements for a new exclusive offering. Victims are requested to submit personal information to process fictitious loans. They are assured that the loan can be repaid from the profits generated on the platform, but eventually, their accounts are blocked, and they begin receiving legal threats and demands for repayment from their funds.

A new risk to crypto users known as the “overlay attack” was highlighted by Asaf Ashkenazi, CEO of Verimatrix. This attack involves creating a counterfeit interface on the user’s mobile device. This interface is utilized to phish for sensitive information such as logins, passwords, and even two-factor authentication (2FA) codes. Once acquired, the attacker leverages this information to access the victim’s various applications.

To execute an “overlay attack,” fraudsters first persuade users to download an application on their mobile device. These applications are typically disguised as mobile games. When the user launches this app, it begins to monitor the opening of an online banking or crypto exchange app. It then generates a fake interface that mimics the original app’s interface. Consequently, when the legitimate app is opened, the user inadvertently interacts with the counterfeit version, unknowingly providing their passwords and IDs to the scammers. After obtaining the required information, the scammers cause the victim’s mobile device screen to go dark, creating the illusion that the phone has run out of battery or has frozen. While the victim attempts to restart or charge the device, their accounts are reset to zero.

Analysts caution that phishing and manipulation tactics are becoming increasingly perilous for Web3 users, prompting cryptocurrency firms and technology giants to form coalitions in the battle against online fraud.

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