Canada’s Lethbridge Police Service Combats Cryptocurrency Scams with Technology
Integrating Chainalysis Reactor to Track Transactions and Recover Stolen Funds
Canada’s Lethbridge Police Service (LPS) is integrating technology to combat cryptocurrency scams and help victims recover funds. By deploying Chainalysis Reactor, law enforcement aims to track cryptocurrency transactions and recover stolen funds. The program can identify and categorize millions of addresses, including those of illegal and legitimate services.
The police will rely on a certified analytical investigator from the Economic Crimes Unit.
Chainalysis Reactor software allows for accurate tracking of cryptocurrency transactions, while taking advantage of the transparent nature of public blockchains such as Ethereum or Bitcoin through which most of these stolen tokens are deployed.
To investigate cases, relevant data must be entered. The software will then systematically track the money’s path from the victims’ wallets to the exchanges. Once the exchange is identified, investigators will obtain a warrant to access account holder details, transaction history, and outgoing transfers.
However, while catching and prosecuting violators remains a priority, the main goal is to help victims of cryptocurrency scams get their money back.
Police will resort to blockchain analysis to track transactions and find where the stolen coins are kept.
In 2022, Canadians will lose more than $300 million due to investment fraud.
The sudden rise can be attributed in part to cryptocurrency-related scams, where enticing advertisements lure unsuspecting investors and then ensnare them in fraudulent schemes.
Crypto scams often involve scammers pretending to be legitimate investment companies, promising great returns on investments. Scammers gain the trust of potential investors and assist them in the investment process.
However, once investments are made, they manipulate victims into transferring cryptocurrencies to specific wallet addresses before disconnecting and disappearing.
In May, Binance, one of the world’s largest cryptocurrency exchanges, left Canada days after it introduced new guidelines for cryptocurrency exchanges. Some of them included restrictions on investors and compulsory registrations.
Reports indicate that Binance opposed some of these regulatory directives and walked out. However, the exchange said it would work with Canadian regulators to create a comprehensive crypto framework.