Key Takeaways
- • Brooklyn prosecutors dismantled 241 websites and seized 112 servers tied to a cross-border crypto fraud scheme that caused US losses reaching into the tens of millions of dollars, according to the Brooklyn DA's office.
- • The investigation, run by the DA's Virtual Currency Unit with the FBI's New York office, traced the scheme's entry point to Facebook investment ads and its technical infrastructure to Ukraine and elsewhere in Eastern Europe.
- • No arrests were reported; server seizures cut operators off from their victim lists, data and fraud software.
- • The action follows FBI figures showing reported US crypto fraud losses of $11.4 billion in 2025, up 22% year over year.
Summary
Brooklyn prosecutors carried out a coordinated action last week against a cross-border cryptocurrency scheme that caused dollar losses reaching into the tens of millions for Americans. According to the DA's office, the action dismantled 241 websites tied to the schemes and confiscated 112 servers hosted by providers in Eastern Europe and the United States. No arrests were reported. DA Eric Gonzalez described the operation as "one of the biggest operational cyber disruptions undertaken by a local prosecutors' office." Many of the cons targeted Russian-speaking residents of Brooklyn and across the US.
The case began three years ago and was run by the DA's Virtual Currency Unit, formed in 2023 by Gonzalez and led by Assistant District Attorney Alona Katz. Investigators identified Facebook ads pitching investment opportunities as a common entry point for victims and traced the group's technology to infrastructure and IP addresses in Ukraine and elsewhere in Eastern Europe. The unit worked with the FBI's New York office, which is led by James Barnacle, and executed search warrants while coordinating across three time zones. Gonzalez said the unit "identified the fraud, tracked down stolen cryptocurrency, was able to pinpoint the scammers and broke new ground by seizing the servers used by this crime syndicate." Katz said that by taking out the servers, "we disabled the back end of the operation."
The enforcement effort comes against a rising fraud backdrop. According to the FBI, reported US crypto fraud losses hit $11.4 billion in 2025, a 22% increase year over year, and more than 18,000 individuals reported losing over $100,000 each. Before last week's action, Katz's unit had already seized or disrupted 400 web domains tied to crypto investment fraud, including 70 sites in June 2024 linked to $5 million stolen from US residents.
According to the reporting, server seizures can impair criminals' ability to launch new sites and recontact victims, which may slow copycat schemes. The coverage underscores that crypto fraud risk for investors remains significant and that enforcement is increasingly focused on the back-end infrastructure behind these operations.
The case began three years ago and was run by the DA's Virtual Currency Unit, formed in 2023 by Gonzalez and led by Assistant District Attorney Alona Katz. Investigators identified Facebook ads pitching investment opportunities as a common entry point for victims and traced the group's technology to infrastructure and IP addresses in Ukraine and elsewhere in Eastern Europe. The unit worked with the FBI's New York office, which is led by James Barnacle, and executed search warrants while coordinating across three time zones. Gonzalez said the unit "identified the fraud, tracked down stolen cryptocurrency, was able to pinpoint the scammers and broke new ground by seizing the servers used by this crime syndicate." Katz said that by taking out the servers, "we disabled the back end of the operation."
The enforcement effort comes against a rising fraud backdrop. According to the FBI, reported US crypto fraud losses hit $11.4 billion in 2025, a 22% increase year over year, and more than 18,000 individuals reported losing over $100,000 each. Before last week's action, Katz's unit had already seized or disrupted 400 web domains tied to crypto investment fraud, including 70 sites in June 2024 linked to $5 million stolen from US residents.
According to the reporting, server seizures can impair criminals' ability to launch new sites and recontact victims, which may slow copycat schemes. The coverage underscores that crypto fraud risk for investors remains significant and that enforcement is increasingly focused on the back-end infrastructure behind these operations.
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