The Brooklyn District Attorney's Office, led by Eric Gonzalez, has uncovered a sophisticated cryptocurrency scam that defrauded individuals across the United States of millions of dollars.
So-called “pig butchering” schemes revolve around deceptive practices in which scammers befriend unsuspecting victims online and lure them into investing in cryptocurrencies through fraudulent websites and apps. I did. Then they finally blocked them from withdrawing their funds, resulting in a complete loss of their investment.
Gonzalez expressed concern about the prevalence of such scams, saying they are fooling residents outside of the Brooklyn borough of New York City. Losses from similar programs run into the billions of dollars annually.
He also emphasized the importance of public awareness and education as a key safeguard against such widespread fraud, and urged skepticism of overly attractive investment opportunities in cryptocurrencies.
The investigation was led by the Public Prosecutor's Office's Cryptocurrency Unit and included a case involving a 51-year-old woman who fell victim to a similar scam in March 2023 and reported a loss of $22,680. This stemmed from a large number of complaints received by the department. .
She was lured into investing through a chat group discussing cryptocurrency investments, which led to large deposits and false promises of high returns. But she encountered an obstacle when she tried to withdraw the funds and ultimately lost her entire investment.
“Investment returns that sound too good to be true are almost always just fake,” Gonzalez says. “Therefore, I urge everyone to be extremely skeptical of anyone you have not met in person who offers a lucrative investment opportunity in cryptocurrencies.”
A detailed analysis of cryptocurrency transactions reveals the complexity of this scheme. Gonzalez's team discovered a network of domains and servers associated with the fraud.
The investigation also identified multiple victims from different states, highlighting the far-reaching impact of such scams.
Additionally, investigators discovered a network of more than 80 domains associated with the scam, with the epicenter being a website known as coinformat.com. Through forensic analysis, the Attorney General's Office identified a malicious mobile app associated with the scam that could secretly extract sensitive user information.
Additionally, the DA highlighted the international nature of these cryptocurrency fraud schemes, saying they are often facilitated by human trafficking victims in Southeast Asia, posing challenges to localized prosecution and asset recovery efforts. .
To combat these scams, Gonzalez's office seized coinformat.com and 20 related domains, as well as three virtual servers hosting these fraudulent sites.
The office also launched a comprehensive awareness campaign to educate residents about the warning signs and precautions against cryptocurrency scams, particularly targeting vulnerable communities like Chinese and Russians in Brooklyn. .
Mr. Gonzalez identified risks that may point to potential crypto fraud, including unsolicited text messages promoting lucrative investments, solicitations to join investment groups on messaging platforms, and coercive tactics such as downloading unverified investment apps. I warned you about the traffic lights.
He also advised individuals to research and verify the legitimacy of companies, avoid sharing personal information, and refrain from investing based solely on online recommendations.
