New York Busts Crypto Scam Using Fake Facebook Ads

A Sophisticated Scheme Dismantled

In a major development in the global fight against digital financial crime, the New York Attorney General’s Office announced on June 19, 2025, that it had dismantled an international crypto scam network that had defrauded hundreds of Russian-speaking individuals across Brooklyn and surrounding areas. This operation was made possible through a collaborative investigation involving the Attorney General, the Brooklyn District Attorney, and the New York Department of Financial Services (DFS).

The scam network, operated remotely from Vietnam, used misleading Facebook advertisements written in Russian to lure unsuspecting individuals into fraudulent cryptocurrency investment schemes. At least 300 victims were identified, and authorities successfully froze and recovered a significant portion of the stolen funds. Meta, the parent company of Facebook, took action by shutting down more than 700 accounts connected to the fraudulent campaign, in what is now being viewed as one of the most coordinated digital financial takedowns of 2025.

The Modus Operandi: False Promises and Fabricated Returns

According to the Attorney General’s office, the scam began as early as October 2024. The perpetrators created and ran advertisements on Facebook that appeared to promote legitimate cryptocurrency investment platforms. These ads were designed with high production value, false success stories, and testimonials from alleged investors who claimed to have earned substantial profits. All content was in Russian, targeting immigrants or foreign-language speakers with limited access to mainstream American financial news and fraud alerts.

Victims who clicked on the ads were redirected to fake websites—carefully crafted to look like authentic crypto exchanges. These websites encouraged users to create accounts and deposit an initial amount of money to begin investing. Once inside, the victims were shown a series of dashboards that simulated real-time trading success. Their fake accounts showed steady returns and “growing balances,” prompting them to invest more money. In many cases, these investors were asked to deposit additional funds to cover fabricated “withdrawal fees” or “foreign tax clearances.”

At this point, communication would abruptly cease. Phone numbers stopped working. Customer service emails bounced. Logins failed. And victims, many of whom had invested their savings or borrowed funds, were left without recourse.

Discovery and Early Investigation

The scam came to the attention of authorities when the Department of Financial Services identified a website claiming to be BitLicense-certified. BitLicense is a highly regulated state certification issued in New York for companies dealing in virtual currency. Upon verification, the site turned out to be fake, using forged licensing documentation and backdated digital certificates. It was a red flag.

This discovery led investigators down a broader rabbit hole of fraudulent websites, all interconnected and linked to the same network of scammers. Investigators unearthed a well-organized web of domain names, advertising networks, financial wallet addresses, and cloud-based file sharing platforms used to manage victim data.

The DFS quickly escalated the matter, bringing in the New York Attorney General and the Brooklyn District Attorney to assist in the financial crime investigation. Within weeks, the team had connected this web to a central command structure located in Vietnam.

Social Media as the Engine of Deception

The scam’s power lay in its reach. Authorities estimate that more than one million dollars were stolen in Brooklyn alone, and potentially more across other regions. The fuel behind this operation was an extensive digital advertising campaign that weaponized Facebook’s vast reach.

Scammers purchased advertising slots using stolen cryptocurrency and relied on third-party black-market services known as “Black Hat Ad Networks.” These services specialize in bypassing platform rules through obfuscation, fake identification, and proxy accounts. These deceptive ads made it past Meta’s content filters and were shown directly to users who had previously engaged with cryptocurrency-related content.

Once alerted by law enforcement, Meta conducted its own internal investigation and took down over 700 accounts that had been connected to or used for distributing the scam ads. This included both paid advertiser accounts and thousands of related dummy profiles that interacted with the ads to simulate credibility.

Asset Recovery and Financial Interventions

New York Attorney General Letitia James announced that her office successfully froze approximately $300,000 worth of cryptocurrency linked to the scam. This was achieved through court-authorized warrants and cooperation with cryptocurrency exchanges.

Additionally, the Brooklyn District Attorney’s Office seized another $140,000 in digital assets during coordinated raids. Authorities served search warrants on digital domain registrars, cloud service providers, and cryptocurrency wallet hosts. Over 100 domain names and 17 registrar accounts were shut down.

These operations effectively dismantled the infrastructure that had enabled the scam’s reach and longevity. Several email accounts used to communicate with victims were also blocked, preventing scammers from launching duplicate or follow-up schemes.

Victim Identification and Prevention of Further Losses

Authorities acted swiftly not only to shut down the network but also to prevent further harm. After analyzing metadata from seized files and email correspondence, they identified more than 300 victims. Many were contacted directly and warned about the scam before they sent more funds.

In several instances, law enforcement’s timely intervention prevented additional payments from being made, sparing victims from deeper losses. Investigators also worked with community organizations and Russian-language news outlets to circulate warnings and education material about the ongoing scam.

Voices from the Front Lines

Brooklyn District Attorney Eric Gonzalez emphasized the importance of inter-agency cooperation, stating, “Crypto scams like this thrive in the digital shadows. But this time, with the help of vigilant investigators and committed platform accountability, we were able to identify, interrupt, and dismantle a sophisticated fraud network.”

Attorney General Letitia James added, “Our team acted quickly, not only recovering stolen money but also warning victims before they lost more. That’s the kind of proactive enforcement we need in today’s digital economy.”

She further urged New Yorkers who suspect they’ve been targeted by similar scams to report immediately and use the Office of the Attorney General’s complaint channels. Whistleblowers within the crypto and advertising industries were also encouraged to report anonymously, further bolstering public protections.

The Role of Technology and Black-Hat Infrastructure

The scam relied heavily on black-hat infrastructure—cloaked IP addresses, shell companies to rent domains, and advertising contracts designed to mislead. Investigators noted that the scammers used cryptocurrency to pay vendors, making the funds harder to trace. In one case, investigators found payments being routed through as many as seven digital wallets before hitting an ad provider account.

This case illustrates how scammers now combine advanced digital marketing with financial laundering methods to avoid detection. It also highlights the need for international cooperation, as many services used in the fraud were hosted overseas or operated under the jurisdiction of non-cooperative territories.

What This Means for Crypto Investors

For individual investors, this case serves as a stark reminder to perform thorough due diligence before participating in cryptocurrency schemes—particularly those promoted through social media. If a platform lacks transparent licensing, verifiable financial partners, and physical presence, the red flags should be taken seriously.

People who are new to digital assets, especially immigrants or non-native English speakers, are often more vulnerable to such deception. This makes education and outreach a critical part of any prevention effort.

Impact on Social Media Platforms

Meta’s role was crucial but reactive. After being notified by law enforcement, it did act promptly. However, this case has reignited the conversation about whether social platforms are doing enough to proactively prevent the use of their networks for fraud.

Advocacy groups have once again called on platforms like Facebook and Instagram to implement real-time ad vetting tools for crypto and finance-related ads. This may include human review for ads targeting vulnerable communities or involving investments over a certain threshold.

Legal and Regulatory Implications

The use of a forged BitLicense certificate revealed gaps in how licensing data is verified by the public. The DFS is reportedly working on developing a real-time API that allows websites and consumers to verify license data against an official registry.

Meanwhile, lawmakers in Albany and Washington, D.C. are reportedly drafting stricter legislation around crypto advertising, black-hat marketing, and the use of cryptocurrency in cross-border frauds. Penalties are expected to become more severe for intermediaries who knowingly enable such practices.

Looking Forward: Strengthening Public Defenses

This case has galvanized public institutions to take more aggressive preventive measures. Public awareness campaigns in multiple languages are now being planned, including online ads, community outreach programs, and targeted education in vulnerable neighborhoods.

Additionally, a new task force dedicated to tracking crypto-related financial crimes across state borders has been proposed. This would ensure better data-sharing between jurisdictions and faster action when similar schemes are detected.

For more information on crypto fraud and preventive measures, visit the New York State Attorney General’s office 

Conclusion: Vigilance, Collaboration, and Education are Key

The crypto scam disrupted in New York is a prime example of how vulnerable the digital economy remains to bad actors. However, it is also a case study in successful, cooperative law enforcement that crosses national and technological boundaries.

With over 300 victims identified, $440,000 in digital assets recovered, and more than 700 fake Meta accounts removed, this operation demonstrates what is possible when government agencies and tech companies work in tandem.

But the fight continues. As scammers innovate, so must the defense mechanisms—from smarter ad algorithms and tighter exchange compliance, to vigilant users and prompt whistleblowers. The message is clear: vigilance, collaboration, and education are our best defenses in the digital age.

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