Cryptocurrency NewsCanadian Police Utilize Chainalysis Reactor to Combat Crypto Scams and Aid Victims...

Canadian Police Utilize Chainalysis Reactor to Combat Crypto Scams and Aid Victims in Fund Recovery

The Lethbridge Police Service (LPS) in Canada is leveraging technology to combat crypto scams and aid victims in recovering their funds. By using Chainalysis Reactor, law enforcement aims to track crypto transactions and retrieve stolen funds. The software can identify and categorize numerous addresses, both legal and illegal, including those involved in criminal activities.

To achieve this, the police will rely on a certified blockchain analysis investigator from the Economic Crimes Unit. The Chainalysis Reactor software enables detailed tracing of crypto transactions, making use of the transparency of public blockchains like Ethereum and Bitcoin, which are often used for these stolen tokens.

During investigations, relevant data will be inputted into the program, which will systematically trace the flow of funds from victims’ wallets to exchanges. Once the exchange is identified, investigators will seek judicial authorization to access account holder details, transaction histories, and outgoing transfers.

However, while catching and prosecuting wrongdoers remains a priority, the primary objective is to assist victims of crypto scams in recovering their money. To achieve this, the police will employ blockchain analysis to track transactions and locate where stolen coins are being held.

The surge in investment fraud in Canada, with losses exceeding $300 million in 2022, can be partly attributed to crypto-related scams. These scams often involve fraudulent investment firms enticing unsuspecting investors with promises of substantial returns. The scammers gain the trust of potential investors and guide them through the investment process. Once the investments are made, the scammers manipulate the victims into transferring their crypto to specific wallet addresses before disappearing and severing all communication.

In May, Binance, one of the world’s largest crypto exchanges, left Canada shortly after the introduction of new guidelines for crypto exchanges, including investor constraints and mandatory registrations. Binance reportedly opposed some of these regulatory directives, but the exchange stated its willingness to collaborate with Canadian regulators to establish a comprehensive crypto framework.


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