Brooklyn DA Tackles Cryptocurrency Scams with Community Outreach and Education
DA’s Office Disrupts Scam, Warns 1,200 Victims
The Brooklyn District Attorney’s Office has launched a groundbreaking effort to combat cryptocurrency scams targeting Brooklyn’s Russian-speaking community, alerting over 1,200 victims and disrupting a fraudulent network preying on unsuspecting investors.
Operation Dismantled
The DA’s office announced last week that investigators dismantled the operation by seizing the mail servers of illegal cryptocurrency traders, uncovering contact information used to deceive victims. The office then sent email alerts to more than 1,000 individuals whose information was extracted from the servers, warning them to stop investing money into what they deemed to be fake investment websites.
Fighting Back
"We are using every tool at our disposal to stop crypto investment scams," Brooklyn District Attorney Eric Gonzalez said in a statement. "Since recovering lost funds is often impossible because they’re typically quickly cashed overseas, we focus on disruption and education."
Behind the Scams
In 2023, the DA’s office launched a Virtual Currency Unit following ongoing reports from Brooklyn residents losing their investments in cryptocurrency scams. As the investigation continued, a familiar narrative began to surface. Multiple victims recounted being lured into the scam through Facebook ads that featured a "deepfake" video of Elon Musk encouraging people to invest in cryptocurrency, according to the DA’s office.
Disrupting the Scam
Following their investments, when victims went to withdraw their funds, they would be locked out of their accounts and directed to pay additional fees and taxes. This style of scam is commonly referred to as "pig butchering."
Community Outreach and Education
This particular operation targeted members of the Russian community through Facebook advertising by speaking their language, gaining their trust, and convincing them into making investments that were ultimately stolen, Gonzalez said. "We have now severely disrupted this long-running scam and will continue this work on taking fake investment websites offline to protect the public while raising awareness, so our neighbors can protect themselves."
Shutting Down Domains
Since last April, the Brooklyn DA’s Virtual Currency Unit has shut down 140 domains linked to illegal cryptocurrency investment schemes. The scams are believed to have cost Brooklyn residents – mainly Russian-speaking – over $1 million and U.S. victims approximately $5 million, according to the DA’s office.
Community Event
This month, the DA’s office teamed up with federal partners, including the FBI, the Commodity Futures Trading Commission, and the Security and Exchange Commission, to host an educational seminar in Brighton Beach. More than 100 residents attended the event, where officials answered questions about online scams, identified warning signs, and shared tips for protecting against fraudulent cryptocurrency investments.
Conclusion
As Oren Yaniv, director of communications for the Brooklyn District Attorney’s Office, warned, international cryptocurrency investment scams can target any community. "It’s next to impossible to identify the actual individuals who are doing that. Some of those schemes involve international groups, and in any event, they’re all outside U.S. jurisdiction. So, even if we were to identify anyone, we don’t have jurisdiction over that."
FAQs
Q: How can I verify if a cryptocurrency exchange is authorized to operate in New York State?
A: You can check the organization’s status on the New York State Department of Financial Services website or by calling the department via their hotline at 800-342-3736.
Q: What are some warning signs of cryptocurrency investment scams?
A: Be cautious of unsolicited investment opportunities, pressure to make a quick decision, and difficulty withdrawing funds.
Q: What can I do to protect myself from cryptocurrency investment scams?
A: Verify the legitimacy of an investment opportunity, research the company and its operators, and never invest more than you can afford to lose.
