Huge Interpol operation exposes how prolific crypto scams really are

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Almost 4,000 people were arrested worldwide in a recent sting — but we’re only scratching the surface when it comes to the problem of crypto scams.

Table of Contents

• What is social engineering?
• A persistent threat
• A challenging landscape

Interpol says it’s waging war on online scam networks — and has seized $257 million in assets following a major sting spanning 61 countries.

Operation First Light led to 6,745 bank accounts being frozen, with more than $2 million in cryptocurrencies confiscated.

The sheer scale of Interpol’s efforts are pretty extraordinary, with 3,950 people arrested and a further 14,643 identified as potential suspects.

From phishing attempts to romance scams, and from investment fraud to fake shopping sites, the scope of the criminal activity uncovered was equally wide-ranging.

Source: Interpol

Interpol says these results were achieved through its Global Rapid Intervention of Payments mechanism — otherwise known as I-GRIP for short — which monitors the flow of illicit funds.

There’s little doubt that rapid advancements in blockchain analytics over recent years would have proven especially advantageous to investigators.

“The results of this global police operation are more than just numbers — they represent lives protected, crimes prevented, and a healthier global economy worldwide. By confiscating such large amounts of money, and disrupting the networks behind them, we not only safeguard our communities but also deal a significant blow to the transnational organized crime groups that pose such a serious threat to global security.”

Dr Isaac Kehinde Oginni, Interpol

But other Interpol officials stressed that their work is far from over, with one official warning that “the world is grappling with the severe challenges of social engineering fraud.”

Source: Interpol

What is social engineering?

Social engineering is especially endemic in crypto and Web3 circles, with victims suckered in by claims that are sadly too good to be true.

Back in 2022, Talos Intelligence cited one example of a Discord user being presented with a huge crypto giveaway — but it’s merely an attempt to get their seed phrase.

Such servers are so sophisticated that even mentioning the word “scam” is enough to spark an instant ban.

Meanwhile, those who post about issues they’re having with crypto on X are often replied to by bogus accounts pretending to be the official customer service departments of major brands.

Experts say fraudsters who deploy social engineering attacks also try to inject a false sense of urgency — encouraging victims to act quickly without thinking things through. As Lossless DeFi rightly pointed out:

“Social engineering is a particularly dangerous form of attack as it relies on human error rather than vulnerabilities in software or systems.”

Lossless DeFi

A persistent threat

Romance scams are another common threat that all too often involves cryptocurrency.

The issue has become so prolific that the Federal Trade Commission in the U.S. issued a frank warning to consumers: if someone you meet on social media offers to give you investment lessons, cut off contact immediately — no matter how fond you are of them, or how much attention and affection they’re giving you.

“No one thinks their online love interest is going to scam them, but scammers are good at what they do. They establish an emotional connection with you … but they’ve done their homework, checking out your profile and other information on the platform.”

Federal Trade Commission

And just this week, the FBI warned that victims already devastated by crypto scams end up being targeted once again — with fraudsters posing as lawyers reaching out and promising to offer help in recovering the funds they’ve lost so far. Estimates suggest that at least $9.9 million was lost in such cases in the year to February, and those figures are probably soft.

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A challenging landscape

The results from Operation First Light are encouraging to say the least — in one case, international coordination prevented a 70-year-old from losing $281,000 to a scammer who was masquerading as tech support.

But unfortunately, crypto scams remain exceedingly prolific, and there’s a lot of wrongdoing that goes undetected over the surface.

And it’s important to reflect that, in many cases, even those doing the scamming are working under duress and are victims themselves. UN estimates suggest over 200,000 people have been lured into applying for high-paying jobs overseas, only to have their passports confiscated.

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