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Brooklyn Cops Pull the Plug on 241 Crypto Scam Sites — Servers Had a Bad Day 🖥️

Brooklyn prosecutors and the FBI last week dismantled the online infrastructure of a multinational cryptocurrency investment scheme that stole tens of millions of dollars from Russian-speaking Americans, the Brooklyn District Attorney's Office announced Wednesday. Investigators disrupted 241 web domains and seized 112 servers hosted by companies in Eastern Europe and the United States. No arrests were made. Prosecutors estimate tens of millions of dollars were taken in the scheme and have so far seized about $300,000, with efforts ongoing to claw back additional funds.

"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," Brooklyn District Attorney Eric Gonzalez said in a statement. He credited the office's Virtual Currency Unit and the FBI with the takedown. The unit had been investigating the operation for three years.

According to the release, a large cluster of victims in Brooklyn each responded to a Russian-language Facebook advertisement pitching investment opportunities and then received a call from an "investment advisor" who coached them into opening an account on a crypto investment website. With the advisor's guidance, victims purchased cryptocurrency and sent it to addresses linked to the platforms. When they attempted to withdraw after weeks or months of "investing," they were locked out or told to pay additional fees and taxes. Data from the seized servers showed the scammers also ran a recovery scheme, contacting victims weeks after the initial fraud and promising to retrieve their stolen assets.

Assistant District Attorney Alona Katz, who led the investigation, said seizing the servers was key because it disrupted the scammers' ability to create new websites and contact victims. "We disabled the back end of the operation," Katz said, according to Bloomberg. The scammers relied on infrastructure and IP addresses in Ukraine and other Eastern European countries. Before last week's operation, the Virtual Currency Unit had already seized or disrupted 400 domains linked to the fraud, but new scam sites kept appearing.

The takedown comes amid a broader rise in cryptocurrency-related fraud across the United States. Americans reported $11.4 billion in crypto fraud losses in 2025, a 22% increase from the previous year, according to FBI figures cited by Bloomberg. Separately, Brooklyn prosecutors previously charged Ronald Spektor, a 23-year-old from Sheepshead Bay, with stealing $16 million from nearly 100 Coinbase users through a phishing scheme in which he posed as a representative of the exchange. Spektor was sentenced to four to 12 years in prison.