Over $440,000 in stolen crypto funds has been secured by New York officials in an ongoing fraud investigation that targeted locals.
Authorities from the Brooklyn District Attorney’s Office, the New York State Attorney General’s Office, and the New York State Department of Financial Services jointly disrupted a multi-layered cryptocurrency scam operation that had primarily targeted Russian-speaking residents in Brooklyn and across the United States.
As part of the enforcement action, $140,000 in digital assets was seized, while an additional $300,000 was frozen in crypto accounts linked to the scheme.
The scammers operated a malicious advertisement network across social media platforms that promoted dubious investment schemes to target unsuspecting crypto investors.
The investigation into the scheme, known as “Black Hat” advertising, began in October 2024 when NYDFS detected a fake website, WhalesTrade.com, falsely displaying a BitLicense certification. The site was traced to a broader network of fraudulent platforms used to trick victims into sending cryptocurrency under the guise of high-return investment opportunities.
Many of the platforms used Russian-language advertisements and impersonated known personalities to gain credibility.
Once victims clicked on the ads, scammers shifted communication to encrypted messaging apps like WhatsApp and Telegram, creating the illusion of legitimate investment interactions.
Initial investments were met with fabricated account statements showing inflated returns, to motivate victims to send even more money. When users attempted to withdraw their funds, they were blocked or asked to pay bogus withdrawal fees and taxes. Eventually, scammers completely cut off communication and disappear.
More than 300 victims have been identified, with Brooklyn alone accounting for over $1 million in estimated losses.
Officials reported that Meta, Facebook’s parent company, shut down over 700 Facebook accounts tied to the scam after being alerted to the investigation. Authorities have also dismantled a network of more than 100 fraudulent domains and 17 registrar accounts used to lure unsuspecting investors.
To bypass Facebook’s ad restrictions, the scammers hired “Black Hat” advertisers based in Vietnam and paid them with stolen crypto to run deceptive ads. Authorities found that the scammers converted Bitcoin into Vietnamese currency to fund the campaign, prompting a court order to freeze $300,000 in related accounts.
This case is just one example in a string of scams that have weaponized digital advertising to steal from unsuspecting crypto investors.
Similar tactics were seen earlier in 2024 when fake versions of platforms like Whales Market and Revoke Cash appeared as sponsored links on Google, tricking users into connecting their wallets to phishing sites.
In some instances, even trusted services were impersonated with near-identical domain names, draining user funds through malicious scripts. Despite efforts by companies like Google and Meta to curb such abuse, fraudulent ads continue to surface.
