It was 2 a.m. when Alona Katz watched the servers die. Dozens of them, scattered across three time zones, went dark simultaneously—the physical backbone of a fraud network her team had been hunting since 2023. Katz, chief of Brooklyn District Attorney’s Virtual Currency Unit, had orchestrated the takedown from her home in downtown Brooklyn, refusing sleep as the operation unfolded in real-time.
The scale of the problem forced this aggressive response. In 2025, reported US losses from cryptocurrency fraud hit $11.4 billion, according to the FBI, roughly triple the figure from just three years earlier. Before Katz’s unit existed, victims in Brooklyn were often turned away by the NYPD, which lacked the specialized skills to decode the digital trails of these cons. Brooklyn District Attorney Eric Gonzalez created the VCU in 2023 specifically to close that gap, hiring Katz from the Manhattan DA’s cybercrime bureau.
Katz’s investigation revealed a disturbing demographic pattern. Many victims hailed from Brighton Beach and Sheepshead Bay, neighborhoods with large Russian and Ukrainian immigrant populations. Scammers exploited this trust, posing as fellow immigrants successful in US crypto trading. They lured victims with small initial investments, allowing minor withdrawals to build confidence, before levying prohibitive fees or vanishing entirely when larger sums were requested.
Breaking the cycle required more than shutting down websites, which scammers simply rebuilt under new domains. Katz’s team analyzed the public blockchain ledger to trace funds and identify consistent branding across illicit sites, pointing to a cyber infrastructure rooted in Eastern Europe, including Ukraine. They developed proprietary methods to identify the physical servers supporting these fake platforms, allowing for the permanent seizure executed on Oct 6.
The operation marks a shift from reactive website seizures to proactive infrastructure dismantling. Katz, a lawyer without a programming background who reads poetry, spent years learning the mechanics of digital wallets to outmaneuver the criminals. The next phase involves analyzing the seized server data to identify the specific individuals behind the Eastern European command center, with federal partners expected to assist in international extradition efforts.