Brooklyn Prosecutors Seize 241 Crypto Scam Domains
The Brooklyn District Attorney's Office's cryptocurrency unit, in collaboration with the FBI's New York office, has seized or shut down 241 scam domains and 112 servers.
The operation was led by Assistant District Attorney Alona Katz, head of the Virtual Currency Unit (VCU). The action spanned three time zones, targeting an internationally connected cryptocurrency investment scam network, with infrastructure and IP addresses primarily located in Eastern European countries like Ukraine.
This network primarily targeted Russian-speaking communities, directing victims to fake cryptocurrency investment platforms through Russian-language ads on Facebook. Victims then received calls from self-proclaimed "investment advisors," guiding them to open accounts and transfer funds, only to find their accounts locked or being asked to pay additional fees and taxes when attempting to withdraw.
Some victims, after being scammed initially, were subjected to secondary scams under the guise of "recovering funds." Investigators estimate the related losses to be in the tens of millions of dollars, with some victims losing their entire savings. The prosecutors have currently recovered about $300,000, and no arrests have been reported yet.
This operation marks the conclusion of a three-year investigation. Previously, the unit had seized or shut down about 400 related domains, but new websites continued to emerge. This operation directly targeted the underlying servers to cut off the ability for quick reconstruction.
The FBI's "2025 Internet Crime Report" indicates that cryptocurrency-related fraud losses reached $11.366 billion that year, a 22% increase from the previous year, accounting for more than half of all internet crime losses.
Funds flowed from victims' wallets to addresses controlled by the scam platforms, then transferred through multiple chains. This operation severed the servers and domains, preventing the scammers from continuing to access victim data and operational software, while fund recovery still relies on on-chain tracking and subsequent seizures.
Source: Public Information
ABAB AI Insight
The Brooklyn District Attorney's Office established the Virtual Currency Unit in 2023 to specifically address cryptocurrency fraud targeting the large Russian-speaking population in the area. Alona Katz, who was transferred from the Manhattan District Attorney's Cybercrime and Identity Theft Unit, leads this department and previously oversaw an operation in June 2024 that seized 70 domains linked to approximately $5 million in losses.
This operation shifts the law enforcement focus from merely shutting down domains to also seizing the underlying cloud servers, which are hosted by companies in Eastern Europe and the U.S. By obtaining search warrants across time zones, investigators can access victim records, website content, and operational software, cutting off the scam network's ability to quickly rebuild new domains and re-contact existing victims.
Similar strategies can be seen in other local prosecutors' or federal agencies' infrastructure crackdowns on "pig butchering" and fake investment platforms, such as actions against servers and domains in Southeast Asian scam hubs. The Brooklyn VCU is currently transitioning from individual case recovery to systematically dismantling operational backends, distinguishing itself from earlier methods that relied solely on on-chain fund tracking.
This represents a regulatory shift: local prosecutors, in collaboration with the FBI, are expanding their focus from the flow of funds to the scam infrastructure itself. After the centralized shutdown of domains and servers, the scam network will find it difficult to restore contact with victims in a short time, promoting a shift in law enforcement from passive recovery to actively cutting off operational capabilities, altering the cycle of cryptocurrency investment scams that rely on quickly changing domains to sustain themselves.
ABAB News · Cognitive Laws
Shutting down domains is just changing sites; targeting servers is cutting the root.
Secondary scams turn already lost funds into further losses.
Infrastructure crackdowns turn operational capabilities into law enforcement targets.