Over 50% of Russia’s Financial Pyramids in Q1 Are Crypto-Related

Over 50% of Russia’s Financial Pyramids in Q1 Are Crypto-Related
  • More than 58% of financial pyramids recognized in Russia during Q1 were connected with cryptocurrencies.
  • Scammers were taking advantage of the trending subjects in the news, said top-ranking Russian central bank official.
  • Con artists were also exploiting the sanctions imposed on Russia over its invasion of Ukraine.

More than half of Russia’s financial pyramids in the first quarter of 2022 have used cryptocurrency to attract investors. The regulators have discovered the spread of Ponzi schemes to invest in digital assets in the country amid increasing financial uncertainty.

Valery Lyakh, the director of Bank of Russia’s Department for Combating Unfair Practices, spoke with Tass news agency about the recent discovery. She said:

“Schemes based on transfers using cryptocurrencies or investments in ‘digital instruments’ have received another impetus.”

Lyakh revealed that 58% of the financial pyramids recognized by Russian financial officials in Q1 2022 were connected to cryptocurrencies. 

In addition, the high-ranking official said the scammers took advantage of the trending subjects in the news. He emphasized that “Against the backdrop of financial uncertainties, calls to ‘save money’ in foreign jurisdictions, invest in a foreign project, in foreign securities are popular.” 

Lyakh detailed that scammers have also been exploiting the sanctions imposed on Russia over its invasion of Ukraine, along with these investment proposals. This new scheme includes speaking about projects in the countries that do not support the Moscow sanctions. Moreover, the scammers are offering to circumvent restrictions on international payments.

The talks of Russia using crypto to evade sanctions have raised concerns in the West. Yet, heads of crypto exchanges such as Binance and Coinbase said dodging crypto sanctions is unlikely. Binance revealed that the company is taking extreme measures to avoid this from happening. These measures include banning accounts of Russian officials’ relatives. 

However, scammers can still use these exchanges as Binance and Coinbase deem freezing the assets of normal Russian users illegal. Furthermore, they are not “preemptively banning all Russians from using their platforms, respectively.

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Bryan is a gamer who became genuinely interested in crypto after his initial exposure to Play-to-Earn games like Axie Infinity and Pegaxy. He has basic knowledge of technical analysis and is keeping an eye out for interesting developments in the metaverse and GameFi space.