Brooklyn DA and FBI Shut 241 Fake Crypto Investment Sites: How the Scam Worked, and How to Check a Platform Before You Deposit

What happened

According to Cointelegraph, the operation was carried out the week before it was announced and was run by the Brooklyn DA's Virtual Currency Unit together with the FBI. Investigators shut down 241 websites and seized 112 servers hosted with companies in Eastern Europe and the US. No arrests were announced.

District Attorney Eric Gonzalez said the criminals stole "many millions of dollars" from Russian-speaking victims through an elaborate investment scheme, then tried to exploit the same people again with false promises to recover their money. PYMNTS, citing the DA's release, reported that the Virtual Currency Unit had been investigating the network for three years, that the office estimates tens of millions of dollars were stolen, that some victims lost their life savings, and that about $300,000 has been seized so far.

Taking the servers mattered more than taking the sites. Assistant District Attorney Alona Katz, who led the case, told Bloomberg that the team "disabled the back end of the operation", according to Cointelegraph. Without the servers, the group cannot quickly spin up new copies of the same sites or keep contacting victims.

The case lands as crypto fraud keeps rising. Americans reported $11.4 billion in crypto fraud losses in 2025, up 22% from the year before, according to FBI figures cited by Bloomberg. The FBI's own Internet Crime Report for 2025 puts losses in complaints involving cryptocurrency at $11.37 billion, and names cryptocurrency investment fraud, the exact scheme in the Brooklyn case, as the single largest source of losses to Americans last year at $7.2 billion.

How the scam worked, step by step

The DA's release, as summarised by PYMNTS, describes the same story told by many victims:

1. A Facebook ad in Russian promised an investment opportunity. 2. A call from an "investment advisor" followed. The caller was friendly, patient and helpful. 3. The advisor helped the victim open an account on a crypto "investment platform", a website that looked like a real trading service. 4. The balance grew on screen. The site showed profits, which encouraged larger deposits. 5. The withdrawal failed. When the victim tried to take money out, the account was locked, or the site demanded extra "taxes" or "fees" first. 6. A second scam followed. People who had lost money were later approached with offers to help recover it, which was the same group trying to take more.

The FBI describes the same playbook in its 2025 report: contact through ads, social media or text messages, fake platforms showing fake profits, "taxes and fees" at withdrawal time as a last squeeze, and then recovery scams aimed at the same victims. Nothing on such a site is real. The profit numbers are just figures in a database the scammers control, which is why paying the "tax" never releases anything.

Seven checks before you deposit on any crypto platform

Two of these deserve extra weight. First, the "pay to withdraw" demand: a real exchange deducts the withdrawal fee from the amount you withdraw, and taxes are paid to your tax authority, never to the platform holding your money. Second, the stranger who guides you: real exchanges do not assign personal advisors who phone you about trades.

If you think you have been caught

• Stop sending money, including any "tax", "unlock fee", "insurance" or "anti-money-laundering deposit".
• Save everything: the website address, chat logs, phone numbers, the wallet addresses you sent coins to, and the transaction hashes.
• Report it. In the US, report to the FBI's Internet Crime Complaint Center (IC3) and your local police; elsewhere, to your national police or financial regulator.
• Ignore anyone who offers to recover your money for a fee. The Brooklyn case shows the same network ran recovery scams on its own victims.
• If you sent from a real exchange, tell that exchange's support right away with the transaction details; sometimes they can flag the receiving address.

How to act on this

The safest habit is simple: only deposit on a large, established exchange that you reach by typing its address or opening its official app, and never through a link someone sends you. If you are choosing one, start with our page on Bitget's proof of reserves, licences and protection fund, then open your account from our Bitget exchange page with code nexu888, which gives you a rebate on your trading fees. Every partner link on our site goes to the exchange's own official domain.

If you already hold coins on an exchange, two cheap steps add a lot of protection: turn on an authenticator app or passkey for logins and withdrawals, and add a withdrawal address allowlist so coins can only leave to wallets you have approved. Our guide to whether your Ledger is safe covers the same thinking for hardware wallets, and the Bitget profile lists the security features the exchange offers.

What we could not verify

• The Brooklyn DA's own press release: its website blocked our request, so the details above come from Cointelegraph and PYMNTS, which both quote it.
• The names of the 241 websites; neither report lists them.
• The total number of victims and the exact amount stolen beyond "tens of millions of dollars".

Quick answers

What did the Brooklyn DA shut down? A crypto investment scam network: 241 websites closed and 112 servers seized in Eastern Europe and the US, announced on 14 October 2026.

Who were the victims? Mostly Russian-speaking Americans, many in Brooklyn, who answered Facebook ads in Russian.

How much was stolen? The DA estimates tens of millions of dollars; about $300,000 has been seized so far.

Were there arrests? No arrests were announced.

How do I know a crypto site is fake? The strongest sign is a demand to send new money before you can withdraw. Real exchanges take fees from your balance and never require a "tax" payment to the platform.