Americans lost $11.366 billion to cryptocurrency fraud in 2025, according to the FBI's Internet Crime Complaint Center (IC3), the bureau's central portal for collecting reports of online crime. In Brooklyn, one prosecutor has made shrinking that figure a central mission.

Assistant District Attorney Alona Katz leads 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 taken down were located both in Eastern Europe and in the United States.

The network's primary hunting ground was Russian-speaking communities. The scheme began with Russian-language advertisements on Facebook that steered victims toward fake crypto investment platforms. Seizing those domains transfers control of the web addresses themselves, cutting victims off from the fake platforms behind them.

A second act followed: recovery scams. People who had already lost money were directed into a follow-up scheme that promised to win their funds back. Investigators placed losses tied to these scams in the tens of millions of dollars, and some victims lost their entire life savings.

Prosecutors have clawed back roughly $300,000 for victims so far. No arrests have been reported in connection with the operation.

A Unit Built for Brooklyn's Specific Problem

The VCU launched in 2023 to confront the rise in crypto fraud affecting the borough's sizable Russian-speaking population. Since its creation, the unit has disrupted more than 400 fraud-linked domains, and October's 241 domains alone account for a large share of that tally.

In a June 2024 action, the VCU seized domains connected to at least $5 million in losses. Brooklyn is not alone: other major U.S. prosecutor offices have also built dedicated teams to handle digital-asset crime.

The unit's methods combine blockchain tracing, which follows money as it moves between crypto wallets on a public ledger, with 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, a 22% increase from the prior year. Crypto fraud accounted for more than half of all internet crime losses documented in 2025.

Investment scams, which promise outsized returns to lure deposits into fake trading platforms, drove most of the damage at $7.228 billion—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.

A Persistent Enforcement Gap

The Brooklyn case underscores how targeted such operations have become: rather than casting a wide net, the scammers wrote ads in a specific language and placed them where a particular community spends time online. The recovery-scam angle highlights a second vulnerability, since victims who have just lost money are often desperate to recover it, and that desperation is precisely what the follow-up scheme exploits.

The enforcement gap remains wide. Prosecutors recovered about $300,000 against losses estimated in the tens of millions, and no arrests have been reported—a gap that helps explain Katz's push for state laws. Scam operators can spin up new sites quickly, and cases that cross borders into Eastern Europe are difficult to conclude in a courtroom.

Key questions ahead include 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.