Australian authorities have ramped up their efforts to dismantle a sophisticated crypto scam operation, where fraudsters have been impersonating Binance, the world’s largest cryptocurrency exchange by trading volume.

The Australian Federal Police (AFP), National Anti-Scam Centre (NASC), and Binance Australia have issued urgent warnings to over 130 victims.

How the scam operates

The fraudulent operation involved scammers using SMS and encrypted messaging platforms to pose as Binance representatives, falsely claiming that victims’ accounts had been compromised.

At first glance, the text messages look real because they appear in the same legitimate text messaging thread as Binance communications.

Victims received highly convincing messages that mimicked legitimate Binance support communications, complete with fake verification codes and a contact number directing them to an imposter hotline.

Once the victims called, they were manipulated into transferring their cryptocurrency to a so-called “trust wallet” under the guise of securing their assets—when in reality, the scammers were siphoning off their funds.

Australian federal police revealed that these text messages appeared in the same legitimate text message thread as Binance communications, making them appear even more authentic. The scammers exploited telecom loopholes to spoof sender IDs, allowing their fraudulent messages to be grouped alongside genuine Binance notifications.

The AFP says it has conducted an email and text blizt to warn the 130 people they identified who might have been exposed to this scam. But AFP also said that once the funds are transferred to the thief's wallet, they are quickly transferred through a network of wallets, making seizure or recovery extremely difficult.

String of impersonation attacks

This elaborate scheme was uncovered through Operation Firestorm, a global law enforcement initiative launched last year to dismantle transnational cybercriminal networks targeting Australians with digital fraud.

“The AFP has worked closely with our partners at the NASC to ensure any victims in Australia targeted by these scammers were identified swiftly and given advice to help protect their cryptocurrency accounts.”

The attack mimics another string of strikingly similar attacks reportedly by X users, where the hacker impersonated Coinbase and Gemini to trick users into setting up a new wallet using pre-generated recovery phrases controlled by the scammers.

The police warn that the red flag of such scams including unsolicited contact from someone claiming to be from Binance warning about an account breach, pressure to act quickly and prompts for a seed phrase. Binance Chief Security Officer Jimmy Su also highlights the scammers often impersonate trusted platforms, exploiting certain telecom loopholes to manipulate sender names and phone numbers.

To counter such scams, Binance Chief Security Officer Jimmy Su has advised users to verify official Binance communication channels through Binance’s security tools.

“If in doubt, stop and verify through official sources.”

Australia fighting against SMS scams

In an effort to curb such scams, the Australian government announced plans to introduce an SMS Sender ID Register to prevent fraudsters from exploiting sender names in their scams. Under the new regulation, telecom companies will be required to verify that messages sent under a company’s name correspond to a legitimate registered sender.

The register is set to launch in late 2025, with a pilot program in the meantime acting as an interim safeguard, according to Australia’s Minister for Communications, Michelle Rowland.

The crackdown comes as concerns over crypto-related fraud in Australia continue to escalate.

Just last month, the Australian Competition and Consumer Commission (ACCC) raised alarms about the potential consequences of relaxed crypto regulations in the U.S. under President Donald Trump’s administration.

ACCC Chair Gina Cass-Gottlieb warned that deregulation in the U.S. could create “horror scenarios” for investors worldwide, opening the floodgates to more fraud and consumer exploitation.

The agency’s annual scam report further underscored the growing crisis, revealing that Australians lost over $1.3 billion to investment scams in 2023—with crypto scams playing a major role in those losses.

In response, the Australian Securities and Investments Commission (ASIC) has proposed stricter licensing requirements for crypto firms operating in the country.

Under current Australian laws, businesses offering financial services or dealing in financial products must obtain an Australian Financial Services License (AFSL). Additionally, platforms facilitating the trading of these products may require an Australian Market License.

The proposed regulations would extend these licensing requirements to crypto exchanges and various digital asset firms, signaling a tougher stance on the rapidly evolving crypto sector.

As the fight against crypto fraud intensifies, authorities continue to warn investors to remain vigilant and verify all communications before taking action. With crypto scams becoming increasingly sophisticated, public awareness and regulatory oversight will play a crucial role in mitigating future threats.