The British Columbia Securities Commission (BCSC) has exposed a $4.3 million scam targeting Canadian investors.
The operation, dubbed “Operation Avalanche,” revealed a sophisticated scheme orchestrated by overseas crime groups using a tactic known as “approval phishing.”
This fraudulent method reportedly tricked 89 unsuspecting victims into granting scammers unauthorized access to their cryptocurrency wallets on the Ethereum blockchain, often without realizing they were being robbed.
The two-day operation, conducted in March 2025, brought together a coalition of regulators, law enforcement, and crypto-trading platforms to identify and alert victims.
Partners included the Alberta Securities Commission, Ontario Securities Commission, Quebec’s Autorité des marchés financiers, the RCMP, Vancouver and Delta police departments, and the U.S. Secret Service.
Registered Canadian crypto platforms—Netcoins Inc., Ndax Canada Inc., Coinbase Canada Inc., Wealthsimple Investments Inc., and Shakepay Inc.—played a critical role by providing account holder information when blockchain analysis by Chainalysis traced compromised wallets to their services.
Lori Chambers, BCSC’s deputy director of enforcement, emphasized the challenges in prosecuting overseas scammers, stating,
“Traditional methods of investigating and sanctioning won’t work for these organized crime groups operating beyond our reach.”
Instead, the BCSC is focusing on disrupting scams by proactively warning victims, often while the fraud is still unfolding, to prevent further losses.
The commission is also developing a proactive warning system to enhance investor protection.
This scam highlights the growing threat of crypto fraud in Canada.
In 2022, British Columbians lost $24 million to such schemes, nearly triple the amount recorded in 2021, according to the Canadian Anti-Fraud Centre.
Young adults, often swayed by social media investment advice, are particularly vulnerable.
The BCSC advises investors to verify the registration of crypto platforms, be wary of unsolicited offers, and avoid investments promising guaranteed returns or using complex jargon.
Operation Avalanche not only contacted affected victims but also gathered valuable data to combat future fraud.
By collaborating across jurisdictions and with industry partners, the BCSC aims to make life harder for scammers.
Investors are urged to visit InvestRight.org or cryptoscams.ca to learn red flags and report suspected fraud to local police or the BCSC.
