NEW YORK— A sophisticated cryptocurrency investment scam that preyed on Russian-speaking communities in Brooklyn and beyond has been brought to a screeching halt, thanks to a sweeping investigation by New York State and local authorities. Officials announced the seizure of over $140,000 in stolen cryptocurrency, the freezing of another $300,000 in crypto assets, and the shutdown of more than 100 fake investment websites and over 700 deceptive Facebook accounts used to lure victims.
Brooklyn District Attorney Eric Gonzalez, New York State Attorney General Letitia James, and New York State Department of Financial Services (NYDFS) Superintendent Adrienne Harris led the coordinated effort to dismantle the fraud ring, which used a network of fake websites and social media ads to syphon money from unsuspecting investors.
“This was a calculated and well-funded scam operation that relied on social media manipulation and fake financial credentials to trick innocent people into handing over their money,” Gonzalez said.
A Fake Promise of Fortune
The investigation began in October 2024 when NYDFS identified a suspicious website, WhalesTrade.com, which falsely displayed a BitLicense certificate, a New York regulatory seal meant for legitimate virtual currency firms. That discovery led investigators to uncover a vast network of domains and registrar accounts, all working in concert to promote the illusion of a thriving crypto investment ecosystem.
The scam specifically targeted Russian speakers, using ads written in Russian and often featuring recognisable names to build trust. Once a victim clicked on an ad, the scammers quickly shifted communications to encrypted messaging platforms like WhatsApp or Telegram, where they could further the deception.
Victims were encouraged to make an initial investment and were shown fabricated dashboards indicating rapid returns. That fake success often convinced people to invest more, sometimes totalling hundreds of thousands of dollars. When victims tried to withdraw funds, they were told they had to pay additional fees or taxes. Eventually, the scammers disappeared, leaving victims with nothing.
Seizing the Tools of Deception
As the case unfolded, the scale of the scam became apparent. Investigators were able to trace more than 300 victims, many of whom were personally contacted and warned before they could send more funds. Authorities estimate that the scheme defrauded victims in Brooklyn of over $1 million.
The crackdown involved a series of digital warrants, which allowed officials to seize over 100 domain names and 17 registrar accounts, effectively taking down the scammers’ infrastructure. Authorities also terminated their access to email platforms, severing their communication channels with potential victims.
Through real-time blockchain monitoring, NYDFS and the DA’s office were able to detect active scams in progress and intervene before more money was lost.
The Role of “Black Hat” Advertising and Meta’s Response
A critical component of the scheme’s success was its aggressive advertising campaign on Facebook, where scammers paid third-party “Black Hat” advertisers to bypass the platform’s fraud detection systems. These advertisers, largely based in Vietnam, were paid in cryptocurrency stolen from victims to place deceptive ads that promised sky-high crypto returns.
“Black hat” advertising refers to digital marketing strategies that violate platform policies, including fake identities, cloaked URLs, and misleading claims. According to investigators, over $1 million in stolen crypto was funnelled to these advertisers, who helped the scammers stay one step ahead of Facebook’s review systems.
After being alerted to the investigation, Meta took action, shutting down more than 700 accounts linked to the fraudulent ad campaigns. The Office of the Attorney General (OAG), which focused on tracking payments to these ad brokers, successfully froze $300,000 in crypto accounts tied to the “Black Hat” network.
Educating and Protecting the Public
To help spread awareness, DA Gonzalez made media appearances in Russian-language outlets, explaining how the scam worked and advising residents on how to protect themselves. “This case shows the lengths scammers will go to exploit people’s trust, especially within tight-knit communities,” he said.
Officials are encouraging the public to remain sceptical of unsolicited investment opportunities online and to verify the legitimacy of financial platforms before transferring any money.
As cryptocurrency fraud continues to evolve, this case marks a significant step forward in digital consumer protection, showcasing how law enforcement, regulators, and tech platforms can work together to dismantle criminal networks operating in the digital shadows.
