New York regulators have shut down a cryptocurrency investment scam that targeted Russian-speaking residents in Brooklyn using deceptive Facebook ads.
The operation led to the seizure of $140,000 and the freezing of an additional $300,000 in cryptocurrency, according to a statement from the New York State Department of Financial Services (NYDFS) released Wednesday.
The fraudulent scheme, operated through a now-defunct website called WhalesTrade.com, misled victims with the appearance of legitimacy—allegedly displaying a fake BitLicense certificate. The site was part of a broader scam network that used stolen crypto to purchase domain registrations for fake investment platforms and to fund misleading Facebook advertisements.
Meta, Facebook’s parent company, cooperated with authorities and shut down over 700 accounts linked to the so-called “Black Hat” advertiser behind the scam. In cybersecurity, “Black Hat” advertising refers to the use of deceptive online marketing to trick users into clicking on fraudulent content.
Scam Originated in Brooklyn, Spread via Facebook
The investigation began in October 2024 when NYDFS discovered the fake site WhalesTrade.com. Investigators traced the scam’s funding pipeline: stolen cryptocurrency was funneled into domain registrar payments and Meta ad campaigns designed to promote fake crypto investment offers to Russian-speaking communities in New York City.
The scam exploited trust in the state’s financial oversight by showcasing what appeared to be a valid BitLicense—a license issued by NYDFS to legally operate virtual currency businesses in the state.
Regulators Warn of Sophisticated Tactics
“This action dismantled a sophisticated scheme that leveraged stolen cryptocurrency and misleading advertising to exploit vulnerable users,” the NYDFS said. The department emphasized its commitment to protecting consumers from crypto fraud, especially in cases where legitimate regulatory frameworks are impersonated.
WhalesTrade.com has since been taken offline. Authorities are continuing to investigate the broader network and have warned residents to remain cautious of investment offers promoted through social media platforms.
New York’s crypto watchdogs are urging the public to verify licenses directly through official government sources and avoid investment platforms promoted via unsolicited ads or messages.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/crypto-scam-targeting-russian-speaking-new-yorkers-disrupted-by-state-officials/