Crypto Scam Crackdown
NEW YORK: Authorities in Brooklyn have dismantled a major international cryptocurrency fraud network accused of stealing tens of millions of dollars from Russian-speaking Americans, including residents of New York, by shutting down 241 fraudulent websites and 112 servers linked to the operation.
The Brooklyn District Attorney’s Office announced the enforcement action on October 14, saying its Virtual Currency Unit worked with the Federal Bureau of Investigation (FBI) to identify and disrupt the digital infrastructure supporting the alleged investment scam.
Brooklyn District Attorney Eric Gonzalez described the operation as one of the largest cyber enforcement actions undertaken by a local prosecutor’s office. Investigators traced stolen cryptocurrency and identified the websites and servers used to run the fraudulent scheme.
Victims Targeted Again Through Fake Crypto Recovery Offers
Investigators also uncovered a second layer of fraud targeting people who had already lost money. According to prosecutors, scammers contacted victims weeks after the initial theft, offering to recover their stolen cryptocurrency in exchange for further payments.
Such schemes, known as crypto recovery scams, exploit victims who are desperate to retrieve their lost savings. Fraudsters often pose as recovery specialists or legitimate service providers, promising results while attempting to extract more money.
The Brooklyn DA’s office said the operation involved coordinated efforts to trace the stolen funds and disrupt the infrastructure that enabled the criminals to reach potential victims.
FBI officials credited cooperation between federal and local investigators for helping uncover the network and seize more than 100 domains associated with the operation.
The crackdown follows another major cryptocurrency fraud case prosecuted by the Brooklyn DA’s office. In that case, a man admitted to stealing nearly $16 million from approximately 100 victims by posing as customer support staff for cryptocurrency exchanges. He was recently sentenced to a prison term of up to 12 years.
Authorities have repeatedly warned that cryptocurrency investors can face additional risks after an initial loss, particularly when approached by individuals claiming they can guarantee the recovery of stolen funds.
Investigators have urged victims to remain cautious of unsolicited recovery offers and avoid sharing wallet credentials, private keys or additional payments with unverified services.
The latest action highlights how international cooperation and disruption of online infrastructure can help authorities target cryptocurrency fraud networks and limit their ability to reach new victims.
