Data From Seized Servers Reveals Brooklyn Crypto Scam Hit Victims Twice

With FBI help, investigators seized or disrupted 241 fraudulent domains and 112 servers. Losses are estimated by the DA’s office at tens of millions of dollars, and some victims lost their entire life savings.

How a Facebook Advertisement Led to a Blocked Account

The operation, per the Brooklyn District Attorney’s Office, started with Facebook ads in Russian that promised investment opportunities.

People who answered the ads received a phone call from an “investment advisor” who spoke Russian. That caller walked them through setting up an account on a crypto platform. Next, the advisor assisted them in purchasing cryptocurrency and transferring it to addresses linked to that platform.

After a few weeks or months, attempts to withdraw left victims facing locked accounts. Some were instructed to pay additional fees and taxes before gaining access to their funds.

“It is estimated that tens of millions of dollars were stolen in the course of the scheme, with some victims losing their entire life savings. The DA’s Office has been able to seize about $300,000 in stolen funds so far and is working to claw back more,” the press release added.

Information pulled from the seized servers revealed that the same operation was running a recovery scam. A few weeks went by after the original theft before the operators contacted victims again, offering to retrieve the stolen cryptocurrency.

Why the Crypto Scam’s Servers Were the Prosecutors’ Target

The unit had previously seized or disrupted 400 domains connected to crypto investment fraud. But new replacement sites kept springing up quickly, prompting investigators to trace the servers supporting them and arrange the takedown together with the FBI.

Search warrants were carried out by investigators last week across three time zones. In addition to the 241 domains, over 100 cloud servers operated by Eastern European and American companies were disrupted. The scammers relied on infrastructure located in Ukraine and other parts of Eastern Europe.

Once the servers were gone, the group could no longer reach victim data, site content, or the software it used to operate. According to the DA’s office, the takedown leaves the scammers without the ability to launch new sites quickly or get in touch with existing victims.

The Brooklyn case fits into a broader US campaign against crypto fraud that crosses borders. Federal authorities seized $25 million tied to international fraud networks back in July. The following September, a pact between the US and UK was signed with the aim of going after overseas scam compounds.

For victims in Brooklyn, the prosecutors have said about $300,000 has been seized so far and they remain at work on recovering more.