Brooklyn Prosecutors and FBI Shut Down Major Crypto Scam Network

Authorities in New York have disrupted a large cryptocurrency fraud network accused of stealing tens of millions of dollars from people across the United States. The operation targeted Russian-speaking communities and was carried out by the Brooklyn District Attorney’s Office with support from the FBI.

Announced on October 14, 2026, the action followed a three-year investigation into a group that used fake investment websites to trick people into sending cryptocurrency. Officials shut down or seized 241 websites and 112 computer servers linked to the alleged fraud network.

How the Crypto Scam Worked

Investigators found that the scammers used Russian-language advertisements on Facebook to attract people looking for investment opportunities. After someone showed interest, a person claiming to be an investment adviser would contact them in Russian and explain how to start investing.

Victims were guided through the process of creating accounts on fake cryptocurrency trading platforms. They were then encouraged to buy cryptocurrency and transfer it to wallet addresses controlled by the scammers.

At first, the websites could make the investments appear genuine. However, problems started when victims tried to withdraw their money. Some were locked out of their accounts, while others were told to pay extra fees (fraudulent crypto withdrawal fees) or taxes before their funds could be released. 

Many people lost large amounts of money, and some reportedly lost their entire life savings.

Scammers Targeted Victims a Second Time

The investigation uncovered another part of the operation. After stealing money, the criminals reportedly contacted some victims again a few weeks later.

This time, they offered to help recover the lost cryptocurrency. These offers were also fraudulent, meaning victims faced another attempt to take their money.

Such schemes are known as fake cryptocurrency recovery services. Criminals target people who have already suffered financial losses and make false promises that they can return the stolen funds.

FBI Helps Disable Websites and Servers

Before the latest operation, Brooklyn investigators had already taken action against around 400 website domains linked to crypto investment fraud. However, new websites continued to appear.

Investigators then focused on the computer servers supporting the operation. These servers stored victim information, website content and software used to run the fake platforms. With help from the FBI and other partners, authorities disrupted the network's underlying systems.

Officials have recovered approximately $300,000 in stolen funds so far and are working to trace and recover assets. No arrests were announced in connection with the operation.