New York officials reported an investigation resulting in the recovery of $140,000 and freezing $300,000 in stolen funds as part of a cryptocurrency investment scam using fake ads on social media.
In a Wednesday notice, authorities with the Brooklyn District Attorney’s office, the New York State Attorney’s office and the New York State Department of Financial Services said they had disrupted a scheme to defraud members of the Russian community in the state and nationwide.
According to officials, the scammers used cryptocurrency to pay for fake digital asset investment ads on Facebook and other platforms, leading to the seizure of $140,000 and freezing $300,000 worth of crypto.
“These scammers targeted Russian speakers on Facebook with enticing ads and my office together with DFS and the Brooklyn District Attorney’s office took action to stop these scammers and protect New Yorkers,” said NY Attorney General Letitia James. “I urge all New Yorkers to be vigilant of online cryptocurrency investment ads.”
Though the investigation resulted in recovering or freezing more than $440,000 in stolen funds, authorities reported that the scheme caused more than $1 million in losses from the Brooklyn area alone, with more than 300 victims identified.
The scammers purportedly used a fake crypto investment website claiming to have secured a BitLicense, the license required by crypto firms offering services in New York State.
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Many of the malicious ads on social media, referred to as “Black Hat” advertisements, were in Russian and primarily on Facebook. Meta, Facebook’s parent company, reportedly shut down more than 700 ads after learning of the investigation.
Crypto users still vulnerable to scams
Chainalysis reported that there had been roughly $51 billion in illicit transaction volume involving digital assets in 2024. Though payments related to ransomware attacks dropped 35%, there are concerns about the growing use of artificial intelligence to facilitate scams.
Among the other infamous scams that employed social media ads for fake crypto investments included fake XRP airdrops impersonating Ripple CEO Brad Garlinghouse. In addition to being a prominent figure in the crypto industry, the CEO drew attention for Ripple’s legal entanglements with the US Securities and Exchange Commission.
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