Brooklyn prosecutors, in collaboration with the FBI, disrupted a crypto scam targeting Russian speakers, seizing 112 servers and $300,000 in stolen funds.
Major Takedown of Crypto Fraud Operation
Brooklyn prosecutors, in collaboration with the FBI, have successfully dismantled a significant crypto investment scam that specifically targeted Russian-speaking individuals in the U.S. The operation led to the seizure of 112 servers and 241 web domains, with estimates suggesting that the fraud may have stolen tens of millions of dollars from victims.
District Attorney Eric Gonzalez announced the crackdown, revealing that the Virtual Currency Unit executed search warrants across three time zones last week. The servers, which were hosted by companies in Eastern Europe and the U.S., facilitated a complex scheme that preyed on vulnerable individuals through deceptive Facebook advertisements.
Gonzalez stated, "These criminals stole many millions of dollars from Russian-speaking victims through an elaborate investment scheme, then tried to exploit them again with false promises to recover their money." Victims were lured in by ads and subsequently contacted by so-called "investment advisors" who guided them to create accounts on fraudulent crypto platforms.
Victims Left Defenseless
Once victims invested their funds, they faced significant obstacles when attempting to withdraw their money, often being locked out or facing unexpected fees. Furthermore, data from the seized servers indicated that scammers also operated a recovery scam, reaching out to victims weeks later with promises to recover their lost investments.
Having investigated the operation for three years, the Virtual Currency Unit noted that the large Russian-speaking population in Brooklyn made the borough particularly vulnerable to these scams. Prior to this operation, they had already disrupted around 400 domains related to the fraud, but new sites continued to emerge.
Ongoing Efforts to Recover Funds
Currently, the district attorney's office has seized approximately $300,000 in stolen assets and is actively working to recover additional funds. This recent takedown adds to the Brooklyn DA's track record in combating crypto fraud, following the conviction of a local man who scammed nearly 100 Coinbase users out of $16 million through phishing efforts.
