The Brooklyn District Attorney’s office said it has dismantled the online backbone of a multinational cryptocurrency scam that drained tens of millions of dollars from Russian-speaking victims across the United States.
In a Wednesday statement, the office said investigators working with the Federal Bureau of Investigation executed search warrants across three time zones within hours and seized or disrupted 241 scam domains along with more than 100 cloud servers hosted by Eastern European and American companies. According to the statement, those servers held victim data, site content, and the software used to operate the scheme.
Authorities say the operation targeted the infrastructure behind the fraud
Brooklyn District Attorney Eric Gonzalez said, 「Our groundbreaking Virtual Currency Unit identified the fraud, tracked the stolen cryptocurrency, broke new ground by uncovering the infrastructure behind the operation, and worked with the FBI to dismantle it.」
He added, 「By disrupting more than 100 servers and hundreds of fraudulent websites, we have struck at the heart of this criminal enterprise and made it far harder for these scammers to victimize others. I commend our investigators and thank the FBI for their partnership in this extraordinary operation.」
The scam used Russian-language ads and fake crypto platforms
Prosecutors said the fraud began with Russian-language investment advertisements on Facebook. A Russian-speaking “advisor” then called victims and walked them through opening an account on a fake crypto platform and buying digital assets.
Weeks or months later, when victims tried to withdraw their funds, they were either locked out or told to pay bogus “fees” and “taxes.” Some victims lost their life savings, according to the report.
Victims were contacted again through fake recovery services
After the initial theft, the scammers allegedly returned to the same victims. Prosecutors said they contacted them again weeks later while posing as recovery services and promised to retrieve the stolen money.
The unit had already taken down 400 scam domains, but new ones kept appearing. Prosecutors said going after the servers behind those sites cuts off the group’s ability to launch new websites quickly or reach previous victims.
Three-year investigation has recovered about $300,000 so far
The investigation has run for three years and has recovered about $300,000 to date, prosecutors said. They added that efforts are still under way to claw back more.
The report first appeared in Bitcoin Magazine and was written by Mathew Di Salvo.