Brooklyn, NY — A cross-border cryptocurrency fraud operation that bilked hundreds of victims out of more than $1 million has been dismantled following a major investigation by New York authorities. The coordinated effort led to the freezing of $300,000 in stolen cryptocurrency and the shutdown of over 700 Meta accounts used to propagate the scam.
New York Attorney General Letitia James, alongside Brooklyn District Attorney Eric Gonzalez and New York State Department of Financial Services (DFS) Superintendent Adrienne Harris, announced the successful takedown on Thursday. The scam primarily targeted Russian-speaking residents in Brooklyn through deceptive Facebook advertisements that lured users into fraudulent crypto investments.
Facebook Ads Became Gateway to Deception
The fraud operation, first uncovered in October 2024, began when DFS identified a suspicious website, WhalesTrade.com, falsely displaying a BitLicense certificate, a regulatory approval issued to legitimate virtual currency businesses in New York.
That site was the tip of the iceberg. Investigators soon uncovered a web of over 100 fraudulent domains linked to a broader scam network, many of which were being actively promoted via Russian-language Facebook ads.
These ads promised high returns on cryptocurrency investments, directing users to fake trading platforms. Victims were encouraged to make initial deposits, after which they were shown fabricated account growth, a tactic designed to build trust and coax more funds.
As victims tried to withdraw money, they were told to pay additional fees or taxes, ultimately losing access once communication with the scammers ceased.
Meta Steps In, 700 Accounts Removed
The operation used sophisticated social engineering, often moving victims into encrypted apps like WhatsApp and Telegram to continue communication. The fraudsters were reportedly based in Vietnam, and investigators revealed they paid Vietnamese nationals to run “Black Hat” advertising services, a term for deceptive practices that violate Facebook’s ad policies.
More than $1 million in stolen crypto was allegedly funnelled into these black-market advertising campaigns. Once notified by investigators, Meta acted swiftly, disabling over 700 accounts linked to the scam.
Hundreds of Victims, Some Losses Prevented
According to Attorney General James, over 300 victims were identified, many of whom were contacted by authorities in time to prevent additional losses. Some had already invested tens of thousands of dollars before realising the scam.
“As crypto scams continue to proliferate, it is crucial for law enforcement agencies to work together in order to stop them,” said Brooklyn DA Eric Gonzalez. “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.”
Beyond the $300,000 frozen by the Attorney General’s Office, the Brooklyn DA’s team also seized $140,000 in stolen crypto assets. Additionally, search warrants resulted in the seizure of more than 100 domains and 17 registrar accounts, effectively cutting off the scammers’ digital infrastructure and access to victims.
A Call to Report and Remain Vigilant
Authorities are urging New Yorkers who suspect they may have been targeted by similar scams to come forward. Attorney General James invited victims to submit reports through the OAG’s online complaint system, adding that industry insiders can also file anonymous whistleblower complaints.
The incident serves as a stark reminder of how quickly cryptocurrency fraud tactics are evolving and how social media platforms remain vulnerable entry points.
By targeting a specific language demographic and blending authentic-seeming online platforms with personalised communication, the fraudsters were able to extract substantial sums before being caught.
But thanks to real-time collaboration between state agencies and tech companies, New York officials say they’ve not only disrupted a large-scale fraud campaign but also set a precedent for how future cross-border crypto scams can be dismantled.
Digital Fraud in a Borderless Era
As the global adoption of digital assets grows, so does the complexity of criminal schemes exploiting that technology. With this takedown, New York is reaffirming its commitment to staying one step ahead.
“Crypto may be borderless, but so is our resolve to protect the public,” said Attorney General James. “We will continue to track down fraudsters, freeze stolen assets, and ensure victims have a voice.”
For now, the scammers behind the “Black Hat” campaign are offline and investigators are hopeful that continued vigilance will keep them from coming back online anytime soon.
