Americans lost $11.366 billion to cryptocurrency fraud in 2025, according to the FBI’s Internet Crime Complaint Center. In Brooklyn, one prosecutor is determined to reduce that figure.
Brooklyn Prosecutor Tackles Crypto Scams
Assistant District Attorney Alona Katz leads the Brooklyn District Attorney’s Virtual Currency Unit (VCU). Her most recent operation, conducted in partnership with the FBI’s New York field office, resulted in the seizure or disruption of 241 scam domains and 112 servers on October 14, 2026.
This October action concluded a three-year investigation into a cryptocurrency investment scam network with international connections, tracing links to Eastern Europe, particularly Ukraine. The 112 servers implicated in the scheme were located in both Eastern Europe and the United States.
The network primarily targeted Russian-speaking communities, initiating its fraudulent activities with advertisements on Facebook in the Russian language. These ads directed victims to counterfeit cryptocurrency investment platforms. Following this initial phase, a secondary “recovery scam” emerged, preying on individuals who had already lost money by steering them into a subsequent fraudulent scheme. Investigators estimate the losses from these combined scams to be in the tens of millions of dollars, with some victims losing their entire life savings. To date, prosecutors have recovered approximately $300,000 for victims. No arrests have been reported in connection with this operation.
VCU’s Mission and Impact
The VCU was established in 2023 to address the escalating cryptocurrency fraud affecting the borough’s significant Russian-speaking population. Since its inception, the unit has disrupted over 400 fraud-related domains, with the 241 domains taken down in October representing a substantial portion of this total. In a prior action in June 2024, the VCU seized domains linked to at least $5 million in losses.
The VCU employs blockchain tracing, which monitors the movement of funds between cryptocurrency wallets on a public ledger, in conjunction with server takedowns to disable scam websites. Katz has also been advocating for state legislation aimed at strengthening the prosecution of cryptocurrency scams impacting her community.
The Scale of Crypto Fraud
The FBI’s IC3 2025 report highlighted $11.366 billion in cryptocurrency-related fraud losses for the year, a 22% increase from the previous year. Cryptocurrency fraud constituted more than half of all reported internet crime losses in 2025. Investment scams were the primary driver of these losses, accounting for $7.228 billion—the same category as the Facebook-to-fake-platform scheme disrupted by Katz’s team. Victims aged 60 and older represented nearly $4.4 billion of the reported losses.
Lessons from the Brooklyn Case
For cryptocurrency users, the Brooklyn case underscores the highly targeted nature of these operations. Scammers meticulously crafted advertisements in a specific language and placed them on platforms frequented by a particular community. The recovery scam element also warrants significant attention, as victims desperate to recoup their losses are particularly vulnerable to further exploitation.
The enforcement gap remains considerable. Prosecutors have recovered approximately $300,000 against estimated losses in the tens of millions, and no arrests have been made. This disparity likely fuels Katz’s push for stronger state laws, as scam operators can quickly establish new websites, and cross-border cases involving Eastern Europe present significant challenges for prosecution.
Future developments to monitor include potential legislative action in New York advocated by Katz, whether the October operation leads to any charges, and the extent to which victims may see their funds returned.
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