Almost all financial fraud in Russia is now intertwined with cryptocurrencies, according to a new report published by the Central Bank of Russia. Meanwhile, all organizations reported for suspected illegal activity jumped by 15.5%, reaching 5,735 in 2023, the agency said.
Of particular concern is the proliferation of financial pyramid schemes, where profits are paid to previous investors from funds contributed by new investors, and the growing role of cryptocurrencies.
“In 2023, almost all pyramid schemes and illegal brokers offered to invest in internal tokens or accepted donations in cryptocurrencies,” the central bank said. I have written Russian, translation Decryption Via Google Translate.
Given the promise of anonymity and borderless transactions, cryptocurrencies are attractive. The central bank identified a total of 2,944 crypto pyramid incidents, an increase of up to 150% year-on-year.
Source: Central Bank of Russia
Other key findings include the rise of “pseudo-brokers,” organizations that pretend to be professional securities market participants, such as illegal foreign exchange dealers that rely heavily on cryptocurrencies to hide their activities. The rise of social media as a victim recruitment tool means that, in addition to shortening the lifespan of scams, the number of scams is increasing and the amount lost is decreasing.
“Almost 44% of illegal financiers did not have an office and advertised their services only through the Internet. In most cases, they did not create a permanent site, but instead used social media pages, groups, or It used popular advertising platforms,” the central bank explained.
According to the report, the bank has identified 1,884 cases of illegal lenders using these platforms to advertise their services.
Source: Central Bank of Russia
Russia's central bank is fighting back. The agency said it works closely with law enforcement, internet regulators and the financial sector to curb such fraud, in addition to surveillance systems to detect illegal actors. This includes blocking more than 1,500 fraudulent websites and educating the public about the red flags of financial fraud.
Law enforcement activities are also active, with more than 125 criminal cases and 620 administrative cases opened in 2023.
The statistics come as Russia's stance on cryptocurrencies oscillates between cracking down on fraud and using cryptocurrencies based on the same technology. political maneuvering-Especially to avoid US sanctions. The decentralized nature of cryptocurrencies is a double-edged sword, providing a shield against cross-border sanctions from governments while simultaneously strengthening the arsenal of deception against the public.
Edited by Ryan Ozawa.
