Federal prosecutors and the FBI have dismantled the online infrastructure of a cryptocurrency scam network that stole tens of millions of dollars from Americans — mostly Russian speakers — in one of the largest crypto-fraud enforcement actions of the year.
The joint operation, carried out last week and announced on Wednesday, October 14, by the Brooklyn District Attorney's Office, shut down 241 scam websites and seized 112 servers hosted by companies in Eastern Europe and the United States. It capped a three-year investigation led by Assistant District Attorney Alona Katz, chief of the office's Virtual Currency Unit, working with the FBI's New York field office.
A three-year hunt ends in a server seizure
Investigators traced the network's infrastructure across two continents, identifying which servers powered the fake crypto investment platforms and the victim outreach operation. Because scammers rebuilt replacement websites almost as fast as old ones were taken down, prosecutors shifted strategy: instead of playing whack-a-mole with domains, they seized the servers themselves.
Seizing the backend was the decisive blow. It cut off the group's ability to spin up new domains and to re-contact people who had already lost money — the two capabilities that kept the operation alive day to day. The seizure also preserved evidence, including victim information and the software used to manage accounts, which may support further recoveries and prosecutions.
No arrests were made in connection with the crackdown. Prosecutors framed the infrastructure takedown itself as the operation's core measure against the group — a sign of the growing enforcement preference for dismantling criminal hosting layers rather than waiting years for arrests and trials.
The double-fraud playbook
The network's pitch started with Russian-language advertisements on Facebook, aimed squarely at Russian-speaking communities inside the United States. Responders got calls from purported investment advisers who helped them open accounts on cryptocurrency websites, then instructed them to buy crypto and transfer it to addresses the scammers controlled. When victims later tried to withdraw, they were locked out or told to pay extra fees and taxes.
Then came the second act: recovery scams. The same operation contacted victims again, falsely offering to recover the stolen cryptocurrency — for more fees, or access to new wallets. Brooklyn District Attorney Eric Gonzalez said the operators "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." Some victims lost their entire life savings; prosecutors have so far clawed back about $300,000 for victims.
$11.4 billion and counting
The case lands against a grim national backdrop. Americans reported $11.4 billion in crypto fraud losses in 2025, a 22 percent increase from the previous year, according to FBI figures cited in coverage of the operation — crypto now accounts for more than half of all internet crime losses in the US.
The Brooklyn takedown shows how prosecutors are adapting: Katz's unit has spent years building the playbook for infrastructure-first crypto enforcement, and the 241-site, 112-server action is the biggest bust of her career. The message to fraud groups running on commercial hosting is blunt — your backend is seizable, even when you are out of reach.
By Hamza Faisal
