A cryptocurrency investment scam targeted hundreds of Russian-speaking residents of Brooklyn, N.Y., and across the country, the New York Attorney General’s Office alleges.
The Vietnam-based scammers lured victims with deceptive social media ads in Russian that promised big returns on cryptocurrency and other investments, according to a news release from the Attorney General’s Office. The release gave no indication that anyone has been arrested, charged or prosecuted in the matter.
The alleged scammers persuaded over 100 individuals to buy cryptocurrency and invest it into fake trading platforms, then stole the assets. Meta closed over 700 accounts linked to an advertiser that promoted the scheme after learning about it. A court order froze $300,000 worth of cryptocurrency linked to the scammers, and the Brooklyn District Attorney’s Office confiscated cryptocurrency valued at $140,000.
“Hundreds of New York investors thought they were putting their hard-earned money in safe, high-return investments, only to be defrauded out of millions of dollars,” said New York Attorney General Letitia James. “These scammers targeted Russian speakers on Facebook with enticing ads, and my office, together with DFS and the Brooklyn District Attorney’s office, took action to stop these scammers and protect New Yorkers.”
The investigation, a joint effort of the Office of the Attorney General, the Brooklyn District Attorney’s Office, and the New York State Department of Financial Services. began in October 2024 when DFS learned that a fake cryptocurrency investment website displayed what appeared to be a BitLicense certificate purportedly issued by the agency, according to the release.
DFS issues certificates to legitimate virtual currency businesses operating in New York. NYDFS first identified WhalesTrade.com and learned that the domain name was linked to a large network of related domains and accounts allegedly part of a fraudulent campaign targeting Russian-speaking individuals in Brooklyn and across the United States, the release stated.
Victims were lured by deceptive social media ads, mostly in Russian, that featured popular names and personalities. Scammers responded to those who showed interest and moved the conversation to encrypted messaging apps like Telegram. Once an individual made an investment on the fake platforms, the scammers showed fake data indicating that their accounts were increasing and urged the victim to invest more money. The investments in some cases totaled hundreds of thousands of dollars, but in all cases, the victims could not withdraw their money and were told they had pay more in fake “taxes” and withdrawal fees. The scammers would eventually cease communicating with the victims and kept the funds, authorities allege.
Investigators identified more than 300 victims, many of whom were contacted by the Brooklyn District Attorney and DFS investigators and alerted to the fraud. Investigators estimate that Brooklyn residents alone lost a total of $1 million in the scam.
The Brooklyn District Attorney’s Office executed warrants that seized more than 100 domains and 17 registrar accounts; terminated scammers’ access to their email; seized $140,000 in stolen funds that can be returned to the victims; and, with DFS, monitored blockchain activity in real time. That monitoring operation allowed authorities to warn dozens of individuals who had just begun interacting with the scammers, preventing any further loss of funds. A court order obtained by the OAG froze $300,000 worth of cryptocurrency tied to the scam.
James said that New Yorkers who have been affected by deceptive conduct in cryptocurrency markets should report the conduct to OAG by filing an online complaint. She said cryptocurrency industry workers who may have witnessed misconduct or fraud should file an online whistleblower complaint, which can be done anonymously.
New York state residents seeking to check the legitimacy of a cryptocurrency exchange or to file a complaint about a cryptocurrency company, product, or service can visit the DFS website, or call 800-342-3736.
