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The Virtual Currency Department of the Brooklyn District Attorney's Office collaborated with FBI to dismantle a network consisting of 112 servers and 241 web domain names used for crypto investment fraud.

The prosecution stated that to date, approximately $300,000 in stolen funds have been seized, and they are working to recover more.

On Wednesday, the Brooklyn District Attorney's Office announced that it had dismantled an online infrastructure for a transnational crypto investment scam targeting the Russian-speaking community in the United States, seizing or disrupting 241 web domain names and 112 servers.

The office stated that its virtual currency department, with the assistance of FBI, executed search warrants and other law enforcement actions across three time zones last week. According to the statement, these servers were hosted by companies in Eastern Europe and the United States, and scammers relied on the infrastructure of Ukraine and other Eastern European countries, as well as IP addresses.

Brooklyn District Attorney Eric Gonzalez ( Eric Gonzalez ) said, "These criminals stole millions of dollars from Russian victims through a carefully designed investment scam, and then attempted to exploit them again with false promises, claiming they could help them recover their funds."

The prosecution stated that there is a large number of victims in Brooklyn who had previously responded to a Russian Facebook advertisement offering investment opportunities. Subsequently, they received calls from a so-called "investment advisor" who instructed them to open accounts on an encrypted investment website.

With the help of this advisor, the victims purchased cryptocurrencies and sent them to addresses associated with these platforms. Weeks or months later, when they attempted to withdraw the so-called “investment” profits, they were either locked out of their accounts or informed that they had to pay additional fees and taxes.

Data from the seized servers indicates that scammers are still attempting to "recoup their fraud": they contact the victims weeks after the initial scam occurred, promising to help them retrieve their stolen assets, according to the Brooklyn District Attorney's Office.

Brooklyn Virtual Currency Department

The department has been investigating this matter for three years. According to the statement, Brooklyn's large Russian-speaking population means that this scam has had a disproportionate impact on the residents of that area.

Before last week, the department had already seized or disrupted 400 domain names related to this scam, but new scam websites continue to appear. Prosecutors stated that shutting down the servers will weaken the scammers' ability to quickly create new websites and contact existing victims.

The prosecution estimates that this scam resulted in the theft of tens of millions of dollars. To date, approximately $300,000 has been seized by the authorities, and efforts are ongoing to recover additional funds.

This case is not the only crypto fraud incident recently handled by the Brooklyn District Attorney's Office. Previously, the prosecution also accused a local man of stealing $16 million from nearly 100 Coinbase users through a phishing scam, and that man was ultimately sentenced to up to 12 years in prison.