Illustration depicting the New York City skyline and the impact of cryptocurrency scams.
New York authorities have frozen $300,000 in cryptocurrency linked to a fraudulent scheme that deceived Russian-speaking individuals. The scam has resulted in over $1 million in reported losses, prompting a swift response from the Attorney General’s Office and other agencies. Scammers, operating from Vietnam, utilized fake social media ads to lure victims into investing in nonexistent cryptocurrency platforms. Investigations unveiled over 300 victims, and law enforcement has shut down multiple fraudulent domains while encouraging whistleblowers to report misconduct.
New York authorities have frozen $300,000 in cryptocurrency tied to a sophisticated fraudulent scheme that has targeted hundreds of Russian-speaking individuals in Brooklyn and surrounding areas. The scam has led to reported losses exceeding $1 million within Brooklyn alone, prompting a swift and coordinated response from multiple agencies, including the Attorney General’s Office, the Brooklyn District Attorney, and the New York Department of Financial Services (DFS).
The fraudulent operation involved scammers based in Vietnam who employed deceptive social media advertisements in Russian to promote fictitious cryptocurrency investment platforms. Victims were directed to these fraudulent websites where they were persuaded to invest increasing sums of money. Initially, when victims made deposits, they were shown fabricated account growth data, which falsely indicated success in their investments.
As the scheme progressed, victims were asked to pay additional amounts disguised as “taxes” or “withdrawal fees.” Eventually, communication was severed, leaving victims unable to access their invested funds. The rapid actions of law enforcement have been critical in thwarting further harm, as the Brooklyn District Attorney’s office has also seized an additional $140,000 in stolen cryptocurrency.
In a decisive move, authorities have executed search warrants that resulted in the seizure of over 100 domain names and 17 domain registrar accounts connected with the scam. Email accounts that were used to contact victims have also been disconnected, halting further communications from the scammers. As a result of the investigation, more than 300 individuals have been identified as victims of this extensive fraud, and many have been advised to stop sending additional funds to prevent further losses.
The initial warning of this fraudulent operation came in October 2024 when the DFS identified a website bearing a counterfeit BitLicense certificate. The main fraudulent site, named WhalesTrade.com, was linked to a broader network of associated websites and accounts. Investigators discovered that the scammers utilized “Black Hat” advertising services, having compensated a Vietnamese individual to bypass Facebook’s advertising policies. Since then, Meta (formerly Facebook) has shut down over 700 accounts related to this deceptive advertising campaign after being made aware of the situation.
According to investigations, the scammers reportedly acquired over $1 million in stolen cryptocurrency, which was spent heavily on promoting their fraudulent scheme. In a proactive effort to thwart further fraudulent activity, authorities monitored blockchain activity in real time.
The multifaceted investigation aims not only to dismantle the fraudulent network but also to recover stolen assets and issue warnings to potential victims. The Attorney General has encouraged New Yorkers who suspect involvement in crypto fraud to report suspicious activities through the OAG’s online complaint system. Additionally, the investigation underscores the importance of law enforcement collaboration in combating the rising incidence of cryptocurrency scams, as highlighted by the Brooklyn District Attorney.
Authorities are also making a call for whistleblowers in the cryptocurrency space to report misconduct anonymously, enhancing the collaborative effort to put an end to these types of scams. This coordinated response seeks to safeguard victims and deter future attempts by scammers to exploit individuals seeking to engage in cryptocurrency investments.
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