Brooklyn Prosecutors Shut Down 112 Servers in Crypto Scam Targeting Russian Speakers

Brooklyn prosecutors have dismantled the online infrastructure of a multinational crypto investment scam that targeted Russian speakers in the U.S., seizing and disrupting 241 web domains and 112 servers, District Attorney Eric Gonzalez announced on Wednesday.

The office's Virtual Currency Unit carried out search warrants and other enforcement actions across three time zones last week, working with the FBI. The servers were hosted by Eastern European and American companies, and the scammers relied on infrastructure and IP addresses in Ukraine and other Eastern European countries, according to the release.

"These criminals stole many millions of dollars from Russian-speaking victims through an elaborate investment scheme, then tried to exploit them again with false promises to recover their money," Gonzalez said.

A large cluster of victims in Brooklyn had each responded to a Russian-language Facebook ad for investment opportunities and then received a call from an "investment advisor" who coached them into opening an account on a crypto investment website, the office said.

With the advisor's help, victims bought crypto and sent it to addresses linked to the platforms. When they tried to withdraw after weeks or months of "investing," they were locked out or told to pay additional fees and taxes.

Brooklyn's Virtual Currency Unit

The unit had been investigating the operation for three years. Brooklyn's large Russian-speaking population meant the scam hit the borough's residents disproportionately, according to the release.

Prosecutors estimate that tens of millions of dollars were stolen in the scheme. The office has seized about $300,000 so far and is working to claw back more.

The takedown is not the Brooklyn DA's only recent crypto fraud case. Its prosecutors previously charged a local man who stole $16 million from nearly 100 Coinbase users through a phishing scheme. He was sentenced to up to 12 years in prison.