New York Cracks Down on Crypto Scam Targeting Russian-Speaking Community
On Wednesday, June 18, 2025, New York Attorney General Letitia James announced a significant crackdown on a cryptocurrency scam targeting Russian-speaking New Yorkers, particularly in Brooklyn.
The operation, conducted in collaboration with the Brooklyn District Attorney’s Office and the New York State Department of Financial Services (DFS), resulted in a court order freezing $300,000 in cryptocurrency linked to the scammers. Additionally, the Brooklyn District Attorney’s Office seized $140,000 in cryptocurrency to be returned to victims.
The investigation began in October 2024 when DFS identified a fraudulent website, WhalesTrade.com, falsely displaying a BitLicense certificate, which is issued to legitimate virtual currency businesses in New York to ensure compliance with state regulations. Further investigation revealed a network of interconnected domains and accounts targeting Russian-speaking communities across the state and nation. The scammers used deceptive social media advertisements, primarily in Russian, promising high returns on cryptocurrency investments to lure victims.
The scheme operated by enticing victims through ads on platforms like Facebook, featuring well-known personalities to gain trust. Once victims expressed interest, scammers shifted communications to encrypted messaging apps like Telegram. They encouraged initial investments on fake trading platforms, falsely displaying account growth to prompt further deposits. Victims were later asked to pay additional fees for withdrawals or taxes, only for the scammers to cut contact and abscond with the funds. The investigation estimates losses exceeding $1 million in Brooklyn alone, with over 300 victims identified nationwide.
To evade Facebook’s advertising restrictions, the scammers employed a Vietnam-based individual for “Black Hat” advertising services, using over $1 million in stolen cryptocurrency to fund deceptive ads.
The collaborative effort by the OAG, DFS, and the Brooklyn District Attorney’s Office disrupted the operation through multiple actions. The Brooklyn District Attorney’s Office executed warrants, seizing over 100 domains and 17 registrar accounts, cutting off scammers’ email communications with victims. Real-time blockchain monitoring by DFS and the District Attorney’s Office also allowed investigators to warn dozens of victims, preventing further losses.
“Hundreds of New York investors thought they were putting their hard-earned money in safe, high-return investments, only to be defrauded out of millions of dollars,” said Attorney General James. “These scammers targeted Russian speakers on Facebook with enticing ads and my office, together with DFS, and the Brooklyn District Attorney’s office, took action to stop these scammers and protect New Yorkers.”
“As crypto scams continue to proliferate, it is crucial for law enforcement agencies to work together in order to stop them,” said Brooklyn District Attorney 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 scammers being recovered.”
“Through partnership and collaboration with the Brooklyn District Attorney and New York Attorney General, hundreds of thousands of dollars were returned to victims, and these criminals were held accountable for their deplorable actions,” said DFS Superintendent Adrienne Harris.
The OAG encourages New Yorkers affected by cryptocurrency scams to file complaints online. DFS provides resources to verify the legitimacy of cryptocurrency exchanges and file complaints at dfs.ny.gov/complaint or via phone at (800) 342-3738. Whistleblowers in the cryptocurrency industry can also submit anonymous complaints online to report misconduct.
