A joint investigation led by New York Attorney General Letitia James, Brooklyn District Attorney Eric Gonzalez, and the New York State Department of Financial Services (DFS) has uncovered and dismantled a fraudulent cryptocurrency investment scheme that defrauded hundreds of Russian-speaking New Yorkers.
Authorities have seized and frozen a total of $440,000 in stolen digital assets and taken down over 100 fraudulent websites.
Vietnam-based network targeted 300 Russian-speaking individuals
The scheme, traced to a Vietnam-based network, used deceptive Russian-language advertisements on Facebook to lure victims into investing through fake cryptocurrency trading platforms. Investigators confirmed that over 300 individuals were targeted, with estimated losses surpassing $1 million in Brooklyn alone.
Attorney General James commented, “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. 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. I urge all New Yorkers to be vigilant of online cryptocurrency investment ads.”
The investigation revealed that scammers used “Black Hat” advertising services to promote their platforms on Facebook. These services violate advertising policies and were paid for using cryptocurrency stolen from earlier victims. The scammers exploited this model to repeatedly purchase ad space while concealing their identities.
District Attorney Gonzalez said, “As crypto scams continue to proliferate, it is crucial for law enforcement agencies to work together in order to stop them. That’s what happened in this case, with the fraudulent network being shut down, victims warned to stop investing, and some of the stolen money getting recovered. My office will continue to investigate every reported scam in Brooklyn and to educate residents about how to protect themselves from these dangerous frauds.”
DFS Superintendent Adrienne Harris added, “Through partnership and collaboration with the Brooklyn District Attorney and New York Attorney General, hundreds of thousands of dollars were returned to victims and these criminals were held accountable for their deplorable actions. As a preeminent global regulator of cryptocurrency, the Department will continue to work every day to build a more equitable, transparent, and resilient financial system for all New Yorkers.”
The scam began with websites like WhalesTrade.com, which falsely displayed BitLicense credentials to appear legitimate. Victims were contacted via Facebook and persuaded to continue conversations on encrypted messaging platforms like Telegram or WhatsApp. The scammers falsely showed growing investment account balances to build trust, then blocked withdrawals while demanding additional funds for fake taxes or fees.
According to authorities, victims often invested tens of thousands of dollars—some lost hundreds of thousands. The scammers then cut off contact entirely. Investigators found that stolen cryptocurrency was funneled to domain registrars and advertisers to support the ongoing fraud.
Key enforcement actions included:
- Seizure of over 100 fraudulent domain names and 17 registrar accounts
- Termination of scammer access to related email accounts
- Recovery of $140,000 in cryptocurrency by the Brooklyn District Attorney’s Office
- Court-ordered freezing of $300,000 in crypto assets by the Attorney General’s Office
The Office of the Attorney General’s probe into payments to the “Black Hat” advertiser showed that stolen crypto was converted into Vietnamese currency and used to fund further scam ads. Meta shut down over 700 associated accounts once informed of the scheme.
In addition to asset recovery, investigators successfully contacted dozens of potential victims in real time and prevented further losses by issuing direct warnings. The agencies also worked to educate the broader Russian-speaking community through outreach efforts, including appearances in Russian-language media.
The multi-agency effort demonstrates the increasing focus on cross-border crypto fraud and misuse of digital advertising platforms. It also highlights the importance of regulatory oversight, such as DFS’s BitLicense program, in protecting retail investors from manipulated or fake services.
