- Brooklyn prosecutors disrupted a crypto investment scam, disabling 241 domains and 112 servers.
- Russian-speaking victims lost tens of millions, with only $300,000 recovered so far.
- Investigators uncovered a second scam offering to recover victims’ stolen crypto.
Brooklyn prosecutors have disrupted a multinational crypto investment scam that targeted Russian-speaking Americans, seizing or disabling 241 fraudulent domains and 112 servers linked to the operation.
Brooklyn District Attorney Eric Gonzalez said the Virtual Currency Unit (VCU), working with the FBI, targeted the system supporting the fraud, which investigators estimate stole tens of millions of dollars. Some Brooklyn victims lost their entire life savings, while authorities have recovered approximately $300,000 in stolen funds.
Russian-Speaking Victims Targeted Through Facebook Ads
The investigation began after Brooklyn residents reported similar experiences involving cryptocurrency investment websites. Victims first encountered Russian-language Facebook ads promoting investment opportunities, then received phone calls from individuals posing as financial advisors.
These Russian-speaking callers guided victims through creating accounts on crypto investment platforms. They then instructed victims to buy digital assets and transfer funds to crypto addresses linked to the websites.
However, problems emerged when investors attempted to withdraw their money after several weeks or months. Some discovered their accounts had been blocked, while others faced demands for additional taxes or fees.
Investigators found that the scheme hit Brooklyn hard, which has a large Russian-speaking population. Similar losses were reported elsewhere across the United States.
Brooklyn DA Targets 241 Domains and 112 Servers
Over three years, the VCU investigated the operation and traced crypto transfers associated with the fraudulent investment platforms.
Before the latest enforcement action, prosecutors had already disrupted or seized approximately 400 domains. Nevertheless, replacement websites appeared quickly, allowing the operation to continue. Consequently, investigators shifted their focus toward the basic infrastructure supporting those websites.
Working with the FBI, prosecutors coordinated search warrants and enforcement actions across three time zones. The operation disrupted 112 cloud-based servers hosted by companies in Eastern Europe and the United States.
Authorities also identified infrastructure and IP addresses in Ukraine and other Eastern European countries. The server disruption restricted access to operational software, website information, and victim records, making it harder for the scammers to establish replacement platforms.
Investigators Uncover Second Cryptocurrency Recovery Scam
Beyond the investment fraud, recovered server data revealed another scheme targeting people who had already lost money. Prosecutors say scammers contacted previous victims weeks after their initial losses, offering to recover their stolen cryptocurrency. The recovery operation relied on information linked to the original investment scam, allowing the perpetrators to approach victims again.
Meanwhile, the district attorney’s office continues pursuing stolen funds beyond the approximately $300,000 already seized. Gonzalez also acknowledged assistance from the FBI, Shadow Server, Coeus, and UltaHost during the investigation.
Related: How to Avoid Crypto Scams: Warning Signs Investors Should Know
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