New York Freezes $300K in Crypto in Crackdown on Russian-Language Scam Network
NY Attorney General halts $1M crypto scam targeting Russian-speaking residents with deceptive ads and fake trading platforms.
In a sweeping enforcement action, New York State Attorney General Letitia James has frozen $300,000 in cryptocurrency allegedly linked to a fraudulent investment scheme that targeted hundreds of Russian-speaking residents in Brooklyn and across the United States.
The multi-agency operation, conducted in partnership with the Brooklyn District Attorney’s Office and the New York State Department of Financial Services (DFS), exposed a complex scam run from Vietnam that used fake trading websites and deceptive Russian-language advertisements on Facebook to lure victims.
"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," said AG James.
According to investigators, scammers posed as legitimate investment platforms and used social media ads to build trust, featuring Russian-language messages and fake endorsements. Victims were encouraged to move conversations to encrypted platforms like Telegram, where they were further deceived into making large cryptocurrency deposits.
The platforms falsely showed growing profits, prompting victims to invest more. But when they attempted to withdraw funds, they were met with bogus fees and taxes. the scammers disappeared, leaving investors unable to recover their money.
DFS first flagged the operation in October 2024, when a suspicious website displayed a counterfeit BitLicense certificate—New York’s gold standard for crypto compliance. The domain, WhalesTrade.com, was linked to over 100 fraudulent domains operating under the same scheme.
The scammers reportedly used over $1 million in stolen crypto to fund so-called "Black Hat" advertising services from Vietnam, allowing them to bypass Meta’s ad restrictions and conceal their identities. In response, Meta shut down more than 700 accounts connected to the campaign.
In addition to freezing $300,000 in crypto assets, the Brooklyn DA seized $140,000 more and took down over 100 domains and 17 registrar accounts. Investigators also contacted over 300 victims directly, warning them of the fraud and halting ongoing transfers.
Brooklyn DA Eric Gonzalez emphasized the growing threat of crypto scams: "With the fraudulent network being shut down, victims warned, and some of the stolen money recovered, we’ve delivered a critical blow to a dangerous scheme."
DFS Superintendent Adrienne Harris added: "This is what regulatory collaboration looks like—restoring funds, shutting down operations, and making New York’s financial system safer for all."
The case underscores the increasing use of crypto in cross-border fraud and the vital role of real-time enforcement, multilingual outreach, and platform accountability in protecting vulnerable communities.
