The Lethbridge Police Service (LPS) in Canada is incorporating technology to combat crypto scams and assist victims in retrieving funds. By deploying Chainalysis Reactor, law enforcement aims to trace crypto transactions and recover stolen funds. The software can identify and categorize millions of addresses, including those of illegal and legitimate services.
Police will rely on a certified blockchain analysis investigator from the Economic Crimes Unit.
Chainalysis Reactor software allows for the meticulous tracing of crypto transactions, taking advantage of the transparent nature of public blockchains like Ethereum or Bitcoin from which most of these stolen tokens are deployed.
To investigate cases, relevant data will have to be inputted. The program will then systematically trace the journey of funds from victims’ wallets to exchanges. Once the exchange is identified, investigators will obtain judicial authorization to access account holder details, transaction histories, and outgoing transfers.
Even so, while apprehending and prosecuting wrongdoers remains a priority, the main goal is to help victims of crypto scams get their money back.
Police will turn to blockchain analysis to track transactions and find where stolen coins are kept.
In 2022, Canadians lost over $300 million due to investment fraud.
The surge can be attributed in part to crypto-related scams, wherein enticing advertisements attract unsuspecting investors and then ensnared in fraudulent schemes.
Crypto scams often involve scammers pretending to be legitimate investment firms, promising significant returns on investments. Fraudsters gain the trust of potential investors and help them with the investment process.
However, once investments are made, they manipulate victims into transferring crypto to specific wallet addresses before severing communication and disappearing.
In May, Binance, one of the world’s largest crypto exchanges, exited Canada days after the introduction of new guidelines for crypto exchanges. Some of them included constraints on investors and obligatory registrations.
Binance, reports indicate, opposed some of these regulatory directives and exited. Even so, the exchange said it would collaborate with Canadian regulators to establish a comprehensive crypto framework.