Brooklyn DA Shuts Down Cryptocurrency Scam Targeting Artists

Brooklyn District Attorney Eric Gonzalez announced Friday that his Virtual Currency Unit has dismantled a cryptocurrency scam targeting artists across the United States.

The investigation, led by a team from the DA’s office, began after an 85-year-old Brooklyn painter was defrauded of his life savings, traced the scheme to Nigeria and identified 40 fraudulent NFT marketplace websites. Those domains have now been seized to prevent further victimization, the DA’s office said in a press release.

“Cryptocurrency scams can take many forms but have similar characteristics, such as preying on vulnerable victims and requesting fees to redeem purported earnings,” DA Gonzalez said. “These were the tactics used in this case, leading our investigators to a network of fraudulent websites that specifically scammed artists. It is my hope that by shutting these domains and raising awareness about this scheme, we will prevent others from falling victim to this scam.”  

The probe began in May when the children of a Clinton Hill resident reported their father’s financial and emotional devastation. The professional painter had been contacted via LinkedIn by an alleged art dealer claiming to represent “OpenSea/Private Mint,” a counterfeit version of the legitimate NFT marketplace OpenSea.

The scammer convinced the victim to sign a contract to mint his art as NFTs. The scammer later claimed the NFTs had generated $300,000 in bitcoin but required him to pay fees to access the proceeds. The painter liquidated his IRA, maxed out credit cards, and took out a loan to send over $135,000 in cryptocurrency to the fake platform.

The fraud unraveled when the promised payout never materialized, leaving the victim financially ruined.

The Virtual Currency Unit traced the victim’s payments to accounts at a cryptocurrency exchange. The funds were primarily converted to Nigerian currency, making recovery impossible. Investigators linked the scam to a network of 40 fake NFT marketplace websites, some of which tricked users into entering their cryptocurrency wallet seed phrases, allowing scammers to drain entire accounts.

Though the stolen funds could not be recovered, the DA’s office obtained court orders to seize the 40 fraudulent domains. The sites now redirect to a seizure notice warning users of the scam.

“This scheme targeted artists nationwide and exploited their trust in emerging digital markets,” Gonzalez said. “By taking these sites offline, we are stopping future harm and educating the public.”

The DA’s office provided tips for avoiding similar scams:

• Verify the legitimacy of art dealers and NFT marketplaces.
• Only use trusted NFT platforms and avoid sites requiring high upfront fees.
• Never share your cryptocurrency wallet seed phrase.
• Be wary of offers that seem too good to be true.