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Brooklyn man indicted in $16 million Coinbase cryptocurrency phishing scam case

The Brooklyn District Attorney’s Office said Friday (December 19) that a 23-year-old man from Brooklyn has been indicted for his alleged role in a Coinbase cryptocurrency scam that authorities say cost victims nearly $16 million. Prosecutors estimate that about 100 people across the country were affected.

Officials say the charges stem from an investigation by the office’s Virtual Currency Unit. According to investigators, the man allegedly posed as a customer service representative from Coinbase, reaching out to users and telling them their accounts had been compromised. He then allegedly instructed victims to move their cryptocurrency into new wallets he claimed were secure, but prosecutors say those wallets were actually under his control.

Brooklyn man accused of Coinbase-related crypto scam

Brooklyn District Attorney Eric Gonzalez said in a statement, “This indictment charges the defendant of operating a long-running social engineering scam that amounted to a digital robbery against scores of crypto investors across the country. He allegedly tricked many unsuspecting people to transfer their life savings to wallets he controlled, blew their hard-earned money gambling online, and then bragged about his successful thefts.”

Gonzalez added, “My office is committed to making sure that Brooklyn never becomes a hub for online scams, and we will continue to root out every instance of cryptocurrency fraud, which is a serious problem that’s been exploding throughout the country. We will investigate offenders using the latest technology, freeze their assets whenever possible, and assist the victims.”

The District Attorney’s Office identified the defendant as 23-year-old Ronald Spektor of Sheepshead Bay, Brooklyn. He was arraigned Friday before Supreme Court Justice Danny Chun on a 31-count indictment that includes charges of first-degree grand larceny, first-degree money laundering, scheme to defraud, and other related offenses. Spektor is currently being held on bail.

Prosecutors said authorities have already seized about $105,000 in cash and roughly $400,000 in cryptocurrency, and they are still working to recover additional assets they believe were stolen.

Coinbase users reportedly targeted by Ronald Spektor

Investigators say the alleged scheme focused on users of Coinbase, a US-based cryptocurrency exchange where customers can buy, sell, and store digital assets. Authorities noted that Coinbase users are often targeted in phishing scams, where scammers pretend to be trusted companies in order to trick people into sharing sensitive information or transferring funds.

Over the past year, investigators examined what they described as a coordinated phishing operation that led to losses of about $15.9 million. More than 70 victims were interviewed, many of whom said they were contacted by someone claiming to be a Coinbase representative who warned them their accounts were under threat from hackers. Victims were allegedly convinced to move their cryptocurrency into wallets they believed were safe and under their control, but prosecutors say those wallets were actually accessible by Spektor.

Authorities also allege that the stolen cryptocurrency was laundered through a complex web of transactions involving multiple exchanges, swapping and mixing services, crypto gambling platforms, and online storefronts. Some of the assets were allegedly converted into other cryptocurrencies, cash, gift cards, or digital goods.

According to prosecutors, Spektor’s alleged role in the scheme was established through transaction records, blockchain analysis, digital forensic evidence, and materials recovered during multiple search warrants. Investigators say his home internet connection was allegedly linked to several of the wallets used in the thefts. They also claim he used online forums to recruit others to help with social engineering and to brag about the operation.

Prosecutors further allege that Spektor used the handle “@lolimfeelingevil” on the encrypted messaging app Telegram, where he ran a channel called “Blockchain enemies” and boasted about his activities. They say he also used other encrypted platforms, including Discord, and that recovered messages reference both losing millions of dollars through cryptocurrency gambling and making millions through scams.

Text messages found on his phone allegedly show that after becoming aware of online accusations of fraud, Spektor tried to get rid of a cryptocurrency hardware wallet and replace it.

Victims were spread across the United States, according to prosecutors. One victim in California reported losing more than $1 million, while a Virginia resident said they lost over $900,000. Other reported losses included about $53,150 from a man in Pennsylvania who received fake security alerts and a phone call from someone claiming to work in Coinbase security, and roughly $38,750 from a woman in Maryland who said she was contacted by people identifying themselves as Coinbase employees.

In a statement, Paul Grewal, Chief Legal Officer for Coinbase, said, “We’re grateful to District Attorney Gonzalez and the Brooklyn District Attorney’s Office for their partnership and relentless work to protect victims. In this case, Coinbase supported the investigation by helping identify the perpetrator and the customers he defrauded, providing evidence to ensure he could be charged, and assisting law enforcement efforts to trace and recover funds connected to the fraudulent phishing scheme.”

Grewal added, “We’re committed to protecting our customers and working hand-in-hand with law enforcement to hold scammers accountable and help bring justice for those they harm.”

Prosecutors took the opportunity to remind the public to be careful about phishing scams, warning that legitimate companies usually do not ask customers to move cryptocurrency into so-called safe wallets. They also advised people to double-check messages through official channels and not to act quickly under pressure.

Featured image: Office of the Brooklyn District Attorney

The post Brooklyn man indicted in $16 million Coinbase cryptocurrency phishing scam case appeared first on ReadWrite.

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