New York authorities have disrupted a fraudulent scheme that defrauded victims of $440,000, including $140,000 in cash and a freeze of $300,000 in cryptocurrency.
Fraudulent Scheme and Operations
According to a statement from the New York State Department of Financial Services (NYDFS), the fraud scheme operated through a defunct website called WhalesTrade.com, misleading victims with the appearance of legitimacy by allegedly displaying a fake BitLicense certificate.
Investigation and Funding of the Scheme
The investigation began in October 2024 when NYDFS discovered the fake site WhalesTrade.com. Investigators traced the scam's funding pipeline: stolen cryptocurrency was funneled into domain registrar payments and Meta ad campaigns targeting Russian-speaking communities in New York City.
Regulators’ Warning
According to NYDFS, 'This action dismantled a sophisticated scheme that leveraged stolen cryptocurrency and misleading advertising to exploit vulnerable users.' Regulators advised residents to remain cautious of investment offers promoted through social media platforms.
Authorities continue to investigate the broader network of fraudsters and advise citizens to verify licenses through official sources.
