Thomas Daniels
New York authorities have frozen $300,000 in cryptocurrency linked to a sophisticated investment fraud scheme that leveraged social media platforms to defraud more than 300 individuals, primarily from the Russian-speaking community. The scheme, which generated over $1 million in illicit gains, was disrupted through a joint investigation by the Brooklyn District Attorney’s Office, the New York State Attorney General’s Office, and the New York State Department of Financial Services (DFS).
The scammers used digital assets to finance deceptive advertisements on platforms such as Facebook, falsely promoting a licensed cryptocurrency investment service. These ads, primarily in Russian, directed victims to fraudulent websites that claimed to hold a BitLicense — a requirement for crypto firms operating in New York. The investigation resulted in the seizure of $140,000 and the freezing of an additional $300,000 in stolen digital funds.
“This operation specifically targeted Russian speakers through misleading social media campaigns,” said New York Attorney General Letitia James. “Our collaborative effort with DFS and the Brooklyn DA’s office underscores our commitment to protecting consumers from fraudulent crypto schemes. I urge all New Yorkers to remain cautious of online investment offers.”
Meta, Facebook’s parent company, removed over 700 of the so-called “Black Hat” advertisements following notification of the probe. Despite these efforts, the Brooklyn community alone suffered losses exceeding $1 million.
The case exemplifies a broader trend in digital asset-related fraud. According to a 2024 report by Chainalysis, approximately $51 billion in illicit transactions involved cryptocurrencies. While ransomware-related payments fell by 35%, regulators remain concerned about the increasing deployment of artificial intelligence in scam operations.
Similar fraudulent schemes have included impersonation tactics, such as fake XRP airdrops purportedly linked to Ripple CEO Brad Garlinghouse — a figure well-known for his role in Ripple’s ongoing legal battle with the U.S. Securities and Exchange Commission.
As crypto adoption grows, so do the associated risks. Regulatory authorities are intensifying efforts to safeguard consumers, particularly vulnerable communities targeted via algorithmically tailored content.
