Over Half of This Year’s Financial Pyramids in Russia Involved Crypto, Bank of Russia Finds – Bitcoin News

A majority of the financial pyramids identified in 2022 used cryptocurrencies in one way or another, Russia’s central bank announced in a new report. Russian fraudsters are increasing their activity amid Western sanctions. They often claim to have been licensed by foreign authorities and can offer crypto assets access.

Russian Pyramids Benefit from Western Sanctions & Popularity of Crypto

Over 56% of the pyramid schemes in the Russian Federation during the first half of the year, or 537 entities, raised funds in various cryptocurrencies or advertised crypto investments, a report devoted to countering illegal activities in the country’s financial market reveals. Central Bank of Russia (CBR) published the paper.

RBC Crypto quotes the regulator saying that sanctions imposed in the West for the Ukraine conflict have drastically altered the work conditions of Russian legal financial institutions, and that fraudsters are now able to profit from this situation.

Russians sought alternative investments and new financial pyramids responded to their needs. According to the monetary authorities, these schemes had short lives and were small in scale.

Between January and June 2022, the central bank was able to identify a staggering number of these scams — more than 2,200 companies, projects, and individual entrepreneurs whose operations showed signs of illegal financial activity. It is 3x higher than that of 2021 during the same time period.

Cryptography isn’t the only market these entities were interested in. 671 also targeted the securities industry. These companies pretend to be licensed by regulators in different countries and then collect foreign money or cryptocurrency.

Bank of Russia has notified the Federal Tax Service, Roskomnadzor telecom monitordog and domain name registry authorities to curb their activities. The CBR also takes regular steps to block suspicious websites and maintains a blacklist of entities that are likely to be illegally operating in the country’s financial sector.

Already in May, the Central Bank of Russia registered an increase of financial pyramids that exploit the cryptocurrency theme. Their growth can also be attributed to the increased interest in investment options in the digital assets space due to financial uncertainty.

The Russian Ministry of Internal Affairs recommended this week that criminal prosecutions be brought against those who provide money-laundering assistance to cryptocurrency fraudsters. These so-called ‘droppers,’ sometimes unsuspecting individuals who allowed scammers to use their bank accounts and crypto wallets, can get up to seven years of prison time for their involvement, if lawmakers accept the ministry’s advice.

What do you think about the future of Russia’s crypto pyramids? Please share your thoughts in the comment section.

Lubomir Tassav

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.