The Coinbase users’ phones would get flooded with alerts. They would panic, thinking their cryptocurrency accounts had been compromised.
Then, they would get an email saying an employee with the company, the largest crypto exchange in the United States, would call with help. Sometimes, the email included the name “James Wilson.”
The users would follow the caller’s instructions, moving money to what they were told was a new, safer account that would be controlled only by them. At that point, prosecutors said, their funds vanished into the control of Ronald Spektor, a 23-year-old man who lived in his father’s home on the edge of Brooklyn in Sheepshead Bay.
The Brooklyn district attorney’s office says about 100 users fell prey to his scheme, losing nearly $16 million in cryptocurrency, but they believe there could be more victims. Mr. Spektor emptied crypto wallets, the authorities said, recruited helpers, laundered the money and laughed about it online.
On the encrypted app Telegram, Mr. Spektor posted as @lolimfeelingevil. He bragged, according to prosecutors, of how he lost $6 million in crypto by gambling but made millions more through swindles.
On Friday, Mr. Spektor appeared in State Supreme Court in Brooklyn in khaki pants and an oversize brown jacket, his hands cuffed behind him. He was quiet while he was arraigned on 31-count indictment charging him with first-degree grand larceny, first-degree money laundering and other counts.
Mr. Spektor, who has been held at Rikers Island since the beginning of this month, pleaded not guilty. His lawyer, Todd A. Spodek, said the case against his client “turns on misunderstandings about how cryptocurrency platforms handle user-initiated authorizations and custodial controls.”
Boosters for years have promoted cryptocurrency as a transparent way to free money from the trammels of government regulation, allowing capital to move seamlessly across borders. President Trump has declared himself the crypto president, and his family has enmeshed itself in the industry even as the government has killed investigations and regulations of the industry. Scams and risky practices have flourished, and when the currency is gone, there is often little recourse for credulous victims.
“The trick is to create panic,” said the district attorney, Eric Gonzalez. “Impersonate a trusted person and then pressure the victim to act quickly before they have a chance to really think through what they’re doing.”
People lost their life savings because of Mr. Spektor, he said.
Similar crimes are typically perpetuated by international syndicates, and it is difficult to hold them accountable and recover the money, Mr. Gonzalez said. But because Mr. Spektor is in Brooklyn, he said, “we’re looking to get back as much of the stolen money as possible.”
Prosecutors said $105,000 in cash and $400,000 in crypto were seized from Mr. Spektor.
His case is considered a “social engineering” scheme, where people gain a person’s trust to get personal and financial information. Such crypto frauds have cost American investors billions. The F.B.I. found that complaints of internet crime in 2024 involved losses exceeding $16 billion. Losses involving cryptocurrency, specifically, totaled $6.5 billion.
Cryptocurrencies are digital assets that fluctuate in price like stocks, bonds or other investments. Coinbase, founded in San Francisco in 2012, is a platform where people and companies can buy and sell digital currencies, including Bitcoin. It was the first cryptocurrency company listed on the U.S. Stock Exchange and boomed as crypto grew.
In November 2024, an online sleuth, ZachXBT, who had nearly one million followers and called himself a scam victim turned investigator, posted a thread about Mr. Spektor. Mr. Spektor helped steal $6.5 million from a single user by impersonating Coinbase support, he wrote.
As the warnings began to circulate online, Mr. Spektor asked his helpers to get rid of computer hardware used for the cryptocurrency and purchase new gear, according to prosecutors. Investigators in Brooklyn began looking into his activities. They interviewed 70 victims and found evidence that prosecutors said connected the thefts to Mr. Spektor.
His iPhone showed that he had 12 crypto wallets, according to prosecutors. Those were linked to at least 140 deposits that investigators tracked back to 90 victims. One wallet received cryptocurrency equivalent to about $6.3 million, according to prosecutors. Another user told investigators that in September 2024, about $1 million was transferred from his Coinbase wallet to one controlled by Mr. Spektor.
According to prosecutors, after the funds were withdrawn from the 12 wallets, large amounts of the stolen crypto would be transferred several times and consolidated before being cashed out.
In court Friday, a prosecutor, Alona Katz, said that Mr. Spektor plotted to leave the country — discussing plans to go to Mexico or Canada — and sent $600,000 in crypto to a person in the nation of Georgia.
Mr. Spektor spent months crisscrossing the country on Greyhound buses as he worried that his online outing would lead to criminal charges, prosecutors said. He then returned home to Brooklyn, where he was arrested.
Millions in cryptocurrency are still unaccounted for, and Mr. Spektor knows the key to accessing the funds, Ms. Katz said.
Hurubie Meko is a Times reporter covering criminal justice in New York, with a focus on the Manhattan district attorney’s office and state courts.
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