US Crypto Scam Crackdown Brings 241 Website Shutdowns by FBI, Brooklyn DA

Brooklyn prosecutors, along with the FBI, have shut down 241 websites and 112 servers that were connected to an alleged Eastern European crypto scam network accused of theft worth tens of millions of dollars from Americans. The Brooklyn DA's office made an announcement on October 14 that its Virtual Currency Unit had helped the FBI shut down the systems that were being used for this fraudulent activity, including the servers provided by some companies located in Eastern Europe and the US.

Investigators Target Servers to Prevent Scammers From Rebuilding Fraudulent Websites

According to the announcement, the investigations had involved executing several search warrants and other enforcement actions within three different time zones. The prosecutors noted that the computers contained website data, data from victims, and software to operate the scheme. According to the office, before this latest action by the team, it was able to seize or disrupt 400 domains connected with cryptocurrency investment scams. 

While taking down the websites was helpful in alerting possible victims of the scam, it was noted by prosecutors that replacement sites came up very quickly. By taking down the servers used by the network, the hope was that the scammers would not be able to set up new sites or contact those that they had previously fooled.

Alona Katz, Assistant District Attorney who headed the investigation, commented on the impact of seizing the servers, as per the report published in Bloomberg, “We disabled the back end of the operation.”

Bloomberg reported that the network operated out of Eastern Europe and had fraudulently collected tens of millions of dollars from Americans over the years. As per the district attorney's office, around $300,000 (roughly Rs. 2.8 crore) worth of stolen money had already been seized and more was being recovered.

To the victims, the fraud did not end there. The operators approached the individuals with fraudulent attempts to return their lost cryptocurrencies.

“These criminals stole many millions of dollars from Russian-speaking victims through an elaborate investment scheme, then tried to exploit them again with false promises to recover their money,” said District Attorney Eric Gonzalez.

According to the prosecutors, victims usually got into the scheme through Facebook ads in Russian. Individuals responding to such ads were contacted by supposed investment advisors speaking Russian and assisted in opening accounts at cryptocurrency websites.

In March, the FBI also issued a warning regarding a new phishing scheme targeting Tron blockchain users. This particular attack involves counterfeit tokens designed to resemble official agency branding. The scheme works by dispatching “FBI-branded” tokens to crypto wallets, accompanied by messages alleging the user's account is being probed. Those targeted are then pressured to finish a phony verification procedure to prevent their assets from being locked.