Brooklyn DA Shuts Down Cryptocurrency Scam

The Brooklyn District Attorney’s Office, under the leadership of Eric Gonzalez, has successfully shut down a sophisticated cryptocurrency scam that defrauded individuals across the U.S. out of millions of dollars.

The scam, known as the “pig butchering” scheme, involved scammers befriending victims online and convincing them to invest in cryptocurrencies through fake websites and apps. Once the victims invested their money, the scammers blocked them from withdrawing their funds, resulting in significant financial losses.

Eric Gonzalez’s Virtual Currency Unit uncovered this fraudulent operation and seized 20 domains and three servers associated with the scam, revealing additional victims who had fallen prey to the scheme.

Gonzalez expressed concern about the increasing prevalence of such scams, emphasizing the need for public awareness and education to protect individuals from falling victim to similar schemes. He advised people to be skeptical of overly enticing investment opportunities in the cryptocurrency space.

The investigation, initiated by the Virtual Currency Unit, was prompted by multiple complaints, including one from a 51-year-old woman who lost $22,680 to a similar scam in March 2023. She was lured into investing through online chat groups discussing crypto investments, only to lose her entire investment when she tried to withdraw her funds.

Gonzalez warned against investment opportunities that seem too good to be true, urging people to be cautious of anyone offering high returns on investments in cryptocurrency without meeting them in person.

The DA’s office uncovered a complex network of domains and servers associated with the fraudulent operation, identifying numerous victims from different states who had been affected by the scam. They also found over 80 domains linked to the scam, with a website called coinformat.com at the center of the scheme.

To combat such scams, Gonzalez’s office seized coinformat.com and 20 related domains, as well as three virtual servers hosting the deceptive sites. Additionally, they launched a public awareness campaign targeting vulnerable communities to educate them about the warning signs of crypto scams and how to protect themselves.

Gonzalez advised individuals to research and verify the legitimacy of companies before investing, avoid sharing personal information, and not make investments based solely on online recommendations to avoid falling victim to similar scams in the future.