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More than half of this year’s financial pyramids in Russia involved crypto, finds Bank of Russia – 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. In the midst of Western sanctions, Russian fraud attempts have stepped up their activities, often claiming that they are licensed by foreign authorities to offer access to cryptocurrencies.
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 units, raised funds in various cryptocurrencies or announced crypto investments, shows a report devoted to countering illegal activities in the country’s financial market. The article is published by the Central Bank of Russia (CBR).
Quoted by RBC Crypto, the regulator noted that the sanctions imposed by the West over the conflict in Ukraine have dramatically changed the working conditions of legal financial institutions in Russia, and fraudsters have benefited from the situation.
The Russians were looking for alternative ways to invest, and the answer 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 activities showed signs of illegal financial activity. The report shows that the figure 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, since 671 of them targeted the securities market. According to CBR, these companies often pretend to be authorized by a regulatory body in another jurisdiction and only collect money in foreign fiat or cryptocurrency.
To curb their activities, the Bank of Russia has notified the relevant law enforcement agencies, the Federal Tax Service, Roskomnadzor telecom watchdog and domain name registrars. CBR also takes regular steps to block suspicious websites and maintains a blacklist of entities likely to operate illegally in the country’s financial sector.
Russia’s central bank has already registered an increase in the number of new financial pyramids exploiting the cryptocurrency theme in May. Another reason for their growth has been the financial uncertainty that increased interest in schemes around investment opportunities in the digital asset area.
Meanwhile, the Russian Interior Ministry this week proposed that the Moscow authorities impose criminal liability on those who provide money laundering services to crypto-fraudsters. These so-called “droppers,” sometimes unsuspecting individuals who allowed fraudsters to use their bank accounts and cryptocurrencies, could face up to seven years in prison for their involvement, if lawmakers accept the ministry’s advice.
Do you think the number of cryptocurrencies in Russia will continue to grow, despite the market downturn? Share your expectations in the comments section below.
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