New York State officials have cracked down on a major crypto scam, freezing $300,000 and recovering another $140,000 in stolen cryptocurrency. The fraudulent scheme, which targeted Russian-speaking individuals through fake social media ads, has resulted in over $1 million in losses—mostly in Brooklyn.
According to a joint statement released Wednesday by the Brooklyn District Attorney’s office, the New York State Attorney General’s office, and the Department of Financial Services (DFS), the investigation has so far identified more than 300 victims.
“This crypto investment scam preyed on vulnerable people looking to invest wisely,” said New York Attorney General Letitia James. “Our offices acted swiftly to freeze assets and protect New Yorkers. I urge everyone to be cautious when seeing crypto ads online.”
Social Media Platforms Fuel Crypto Fraud
The scammers behind this crypto investment scam used “Black Hat” advertisements on platforms like Facebook, primarily in Russian. These ads led users to fake investment websites that claimed to be licensed with New York’s BitLicense—a requirement for legitimate cryptocurrency services in the state.
Meta Platforms Inc. (NASDAQ:META), the parent company of Facebook, responded by removing over 700 misleading ads after being notified by authorities. However, the impact had already been severe, with widespread financial losses.
This incident is yet another example of how fraudsters exploit social media to distribute fake offers. The promise of high returns in crypto—paired with convincing visual designs and false endorsements—makes scams like this particularly effective.
Fake Licenses and AI-Powered Deception
One notable aspect of this crypto investment scam was the scammers’ use of a counterfeit claim: that their platform held a BitLicense, New York’s regulatory framework for crypto businesses. This added a false layer of credibility, convincing many users the investment was legitimate.
Furthermore, experts warn that artificial intelligence is playing a growing role in such scams. AI can now create deepfake videos, clone voices, and generate fake testimonials—making it harder than ever to distinguish legitimate investments from fraudulent ones.
According to a 2024 report from blockchain analytics firm Chainalysis, roughly $51 billion in illicit digital asset transactions were recorded this year alone. While ransomware-related payments dropped by 35%, crypto scams—especially those powered by AI—remain a growing threat.
Ripple (available on Binance) and the Ripple (available on Binance) Effect: A Broader Trend
This isn’t the first time crypto scammers have used social media to impersonate major players. Ripple (available on Binance) CEO Brad Garlinghouse has been a frequent target, with scammers creating fake XRP airdrops using his likeness and name. Ripple (available on Binance)’s own legal battles with the U.S. Securities and Exchange Commission (SEC) have kept it in the spotlight, making it a magnet for fraudulent impersonation.
Ripple (available on Binance) Labs Inc. (XRP), while not publicly traded like traditional stocks, remains one of the most followed cryptocurrencies. Its visibility makes it an easy target for social engineering tactics.
How to Avoid a Crypto Investment Scam
To avoid becoming a victim of a crypto investment scam, here are a few key tips:
Verify licenses: Any platform claiming to be registered should be verifiable via government or regulatory websites.
Avoid social media ads: Scammers often buy ad space to look legitimate—don’t click investment links from unknown sources.
Use trusted exchanges: Stick to well-known platforms like Coinbase (NASDAQ:COIN) or Kraken, and avoid unfamiliar sites.
Be skeptical of guarantees: No legitimate investment offers guaranteed returns in crypto.
As crypto adoption continues to rise, so does the risk of falling prey to scams. Vigilance and education remain the best forms of defense.
If you believe you’ve been targeted by a crypto scam, report the incident to your local financial authority or the FTC immediately. Staying informed, asking questions, and verifying credentials can go a long way. As crypto markets evolve, so should our caution—and our commitment to protecting personal and financial security.
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