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

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

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. Amid Western sanctions, Russian scams have stepped up their activities, often claiming to be licensed by foreign authorities to offer access to crypto assets.

Russian Pyramids Take Advantage of Western Sanctions and 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. The paper has been published by the Central Bank of Russia (CBR).

Quoted by RBC Crypto, the regulator remarked that the sanctions imposed by the West over the conflict in Ukraine have dramatically changed the working conditions for legal financial institutions in Russia and fraudsters benefitted from the situation.

Russians were looking for alternative ways to invest, and the response to this demand came in the form of new financial pyramids. The monetary authority explained that these were mostly small-scale schemes with a short lifespan.

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. The report notes that the number is three times higher than the figure from the same period in 2021.

Crypto is not the only area such entities have been interested in, as 671 of them targeted the securities market. According to the CBR, these companies often pretend to be authorized by a regulatory body in a different jurisdiction and collect money exclusively in foreign fiat or cryptocurrency.

To curb their activities, Bank of Russia has notified the relevant law enforcement agencies, the Federal Tax Service, the Roskomnadzor telecom watchdog, and domain name registrars. 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.

The Central Bank of Russia already registered an increase in the number of new financial pyramids exploiting the crypto theme in May. Another reason for their growth has been the financial uncertainty which boosted interest in schemes around investment opportunities in the digital asset space.

Meanwhile, the Russian Ministry of Internal Affairs suggested this week that the authorities in Moscow should introduce criminal liability for those providing money-laundering services to crypto 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.

Do you think the number of crypto pyramids in Russia will continue to grow, despite the market downturn? Share your expectations in the comments section below.

Earning Passive Income With Crypto

Related Posts

Has the U.S. Dollar Index (DXY) Completed Its Uptrend?

After months of upward movement, the U.S. dollar index (DXY) may have peaked and initiated a downtrend. In early August, the DXY broke down from its long-term,…

20000% in One Minute on Play to Earn Game Tothesmart

PRESS RELEASE. The crypto enthusiast has got 10,032 BUSD into their wallet by buying virtual miners in the Play To Earn game Tothesmart for only 50 BUSD….

Ethereum’s Goerli Testnet Implements The Merge, ETH Price Jumps 74% Higher During the Past 30 Days

The Merge has successfully been implemented into Ethereum’s third and final testnet, Goerli, after previously adding Merge support to the testnets Sepolia and Ropsten. The Merge was…

Arsenal Loses Appeal Over Misleading Crypto Advertising

Premier League giants Arsenal F.C. have lost an appeal and been given a second warning by the U.K.’s Advertising Standards Authority (ASA) over the “misleading” marketing of…

Medieval Empires: Ertugrul To Ease Entry Into Web3 Gaming

In light of blockchain gaming’s advancement into the mainstream gaming industry, Medieval Empires: Ertugrul’s founding team attended the Blockchain Economy Istanbul Summit, the biggest blockchain event in…

Biggest Movers: ATOM Climbs to Highest Point Since May, While SOL Rises by Over 10%

Cosmos rose to its highest point since May earlier in today’s session, as crypto markets surged on Thursday. The global market cap is trading over 6.27% higher…