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Brooklyn prosecutor Alona Katz takes on crypto scam networks behind $11 billion in losses
Brooklyn's Virtual Currency Unit and the FBI disrupted 241 scam domains and 112 servers tied to schemes aimed at Russian-speaking communities
Americans lost $11.366 billion to crypto fraud in 2025, according to the FBI’s Internet Crime Complaint Center. In Brooklyn, one prosecutor has made it her job to make that number smaller.
Assistant District Attorney Alona Katz runs the Brooklyn District Attorney’s Virtual Currency Unit, known as the VCU. Her latest operation, carried out with the FBI’s New York field office, seized or disrupted 241 scam domains and 112 servers on October 14, 2026.
Three years of work behind one enforcement day
The October action capped a three-year investigation into a crypto investment scam network with international ties. Investigators traced links to Eastern Europe, particularly Ukraine.
The 112 servers that were taken out sat both in Eastern Europe and in the United States.
The network’s main hunting ground was Russian-speaking communities. The pitch started with Russian-language advertisements on Facebook.
Those ads pointed victims toward fake crypto investment platforms.
Then came the second act: recovery scams. Victims who had already lost money were steered into a follow-up scheme.
Investigators put the losses tied to these scams in the tens of millions of dollars. Some victims lost their entire life savings.
Prosecutors have clawed back about $300,000 for victims so far.
No arrests have been reported in connection with the operation.
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A unit built for Brooklyn’s specific problem
The VCU launched in 2023. Its focus is the rise in crypto fraud hitting the borough’s sizable Russian-speaking population.
Since then, the unit has disrupted more than 400 domains connected to fraud. October’s 241 domains alone account for a large share of that tally.
In a June 2024 action, the VCU seized domains linked to at least $5 million in losses.
The VCU uses blockchain tracing, which follows money as it moves between crypto wallets on a public ledger, alongside server takedowns that knock scam sites offline.
Katz has also pushed for state legislation that would strengthen the prosecution of crypto scams affecting her community.
The national numbers behind the local fight
The FBI’s IC3 2025 report counted $11.366 billion in crypto-related fraud losses for the year. That figure marked a 22% increase from the prior year. Crypto fraud accounted for more than half of all internet crime losses documented in 2025.
Investment scams drove most of the damage, at $7.228 billion. That is the same category as the Facebook-to-fake-platform pipeline Katz’s team just disrupted.
Victims aged 60 and older accounted for nearly $4.4 billion of reported losses.
What this means
For crypto users, the biggest lesson from the Brooklyn case is how targeted these operations have become. The scammers did not cast a wide net; they wrote ads in a specific language and placed them where a specific community spends time online.
The recovery scam angle deserves attention too. Victims who have just lost money are often the most desperate to get it back, and that desperation is exactly what the second scheme exploits.
The enforcement gap is still wide. Prosecutors recovered about $300,000 against losses estimated in the tens of millions, and no arrests have been reported.
That gap helps explain why Katz is pushing for stronger state laws. Scam operators can spin up new sites, and cases that cross borders into Eastern Europe are hard to finish in a courtroom.
What to watch next: whether New York moves on the legislation Katz has advocated, whether the October operation leads to any charges, and whether more victims see funds returned.