## **New York Watchdog Shuts Down Crypto Scam: Over 700 Facebook Accounts Busted**
In a landmark announcement, **Brooklyn District Attorney Eric Gonzalez** teamed up with **New York State Attorney General Letitia James** and **Superintendent of the New York State Department of Financial Services (NYDFS) Adrienne Harris** to unveil a major breakthrough in the fight against cryptocurrency scams. Their extensive, multi-agency investigation has successfully disrupted a fraudulent crypto investment scheme that primarily targeted members of the **Russian community** in Brooklyn and beyond.
### **Unmasking the Scam: How It Worked**
This complex scheme involved the **misappropriation of stolen cryptocurrency** to pay for the creation of deceptive investment domains. Scammers used these fraudulent websites alongside targeted **Facebook advertisements** to lure unsuspecting victims into investing in non-existent opportunities. Upon learning of this investigation, **Meta promptly shut down over 700 accounts** linked to these unscrupulous ‘Black Hat’ advertisers, thwarting their operations.
### **The Financial Fallout: Seizures and Penalties**
The ramifications of this operation are substantial:
– **$140,000 in stolen cryptocurrency** has been seized
– **$300,000 worth of cryptocurrency** has been frozen
– A network of scam websites and registrar accounts has been dismantled
The investigation’s origins can be traced back to **October 2024**, when the NYDFS uncovered a fake investment platform displaying a counterfeit **BitLicense certificate**. These certificates are only provided to legitimate virtual currency businesses in New York to ensure compliance with state laws, consumer protection, and transparency.
The first fraudulent site identified, **WhalesTrade.com**, led investigators to a vast network of related domains and accounts, all aimed at exploiting Russian-speaking residents in Brooklyn, across New York, and beyond.
### **Scammers’ Strategy: Targeting the Vulnerable**
Manipulative tactics were not in short supply. The scammers used **deceptive ads**, many crafted in Russian and proliferating primarily on Facebook, featuring renowned personalities to gain credibility. Once victims expressed interest in investing, the conversation swiftly transitioned to encrypted messaging platforms like **WhatsApp** and **Telegram**.
**Initial investments** were often falsely inflated, with scammers artfully misleading victims into believing their accounts were growing, further enticing them to deposit larger sums. Victims eventually found themselves unable to withdraw their funds, facing fabricated withdrawal fees or taxes, before the scammers severed communication altogether.
### **The Scale of Deception: Examining the Impact**
Through diligent investigative efforts, **over 300 victims** were identified. Many were contacted directly by Brooklyn DA and NYDFS investigators, who alerted them to the ongoing fraud to prevent further losses. Estimates suggest that the scheme has resulted in over **$1 million in losses** in Brooklyn alone.
To curtail this rampant fraud, the District Attorney’s Office executed several warrants that led to:
– Seizure of over **100 scam-related domains**
– Termination of scammers’ web-based email access, hindering their ability to contact victims
– Real-time monitoring of blockchain activity that alerted victims about potential scams
### **Community Outreach: Educating the Public**
In a proactive move to educate the community, DA Gonzalez made appearances in Russian media to discuss the fraud landscape and offer advice on how to stay protected.
### **The Dark Side of ‘Black Hat’ Advertising**
The criminals behind this scam utilized a devious **”Black Hat” advertising** strategy on Facebook, crafting misleading ads promising outrageous returns on cryptocurrency investments. To mask their true identities and circumvent Facebook’s advertising restrictions, they employed individuals from **Vietnam** to facilitate these deceptive campaigns.
The investigation exposed that more than **$1 million in stolen cryptocurrency** was funneled into paying **Black Hat advertisers**, allowing for the continued dissemination of fraudulent ads.
### **Legal Action: Freezing Assets and Preventing Future Fraud**
The AG’s Office joined forces with the investigation, focusing on tracing the flow of funds to these advertisers. Their efforts bore fruit when they secured a court order to freeze **$300,000 in cryptocurrency accounts** tied to the **Black Hat advertisers**.
### **Conclusion: A Warning to Scammers Everywhere**
This collaborative effort by New York’s legal authorities underscores their commitment to combating fraud and protecting consumers. While this particular scam may have been disrupted, constant vigilance and public awareness remain crucial in the ongoing battle against online fraud.
For more insights and updates on cryptocurrency scams, consider checking resources like [CoinDesk](https://www.coindesk.com/) or [Investopedia](https://www.investopedia.com/).
