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Russian Central Bank: “Almost All” Scams Have Crypto “Theme”

Last Updated February 12, 2024 11:49 AM
James Morales
Last Updated February 12, 2024 11:49 AM

Key Takeaways

  • In 2023, the Bank of Russia observed an increase in the number of financial scams involving cryptocurrency.
  • The central bank found that almost 1,500 of the 2944 pyramid schemes identified in 2023 accepted crypto payments.
  • Elsewhere, however, scammers’ preference for crypto declined last year.

It is no secret that modern scammers often favor crypto payments over traditional bank transfers, mostly because it is easier to transact with cryptocurrencies anonymously.

On Friday, February 9, Russia’s central bank reported  that “the number of illegal participants in the financial market who use crypto-themes is growing. But elsewhere, the crypto-related fraud has decreased. 

Bank of Russia Identifies 1,500 Pyramid Schemes That Accept Crypto

In 2023, the Bank of Russia (BoR) found that “almost all pyramid schemes and illegal brokers offered investments in scam tokens or accepted contributions in cryptocurrency.”

The central bank defined pyramid schemes as “pseudo-investment projects” that operate mostly online, spreading via Telegram and other social media platforms. In total, 2944 out of 5733 financial scams identified by the Bank of Russia (BoR) were pyramid schemes, an increase of 927 compared to the previous year. 

Overall, it found that crypto was the most widely accepted form of payment among the schemes discovered, with almost 1,500 accepting contributions in cryptocurrency. 

Bank of Russia crypto scams
Online scams made up most of the pyramid schemes identified by the Bank of Russia. Source

Alongside pyramid schemes, the BoR observed that illegal brokers and dealers also showed a high preference for crypto.

Elsewhere, however, the proportion of schemes involving cryptocurrency declined last year.

Global Crypto Scam Revenues Decline

According to Ponzi Tracker , the share of fraudulent investment schemes in the US that “had a significant nexus to cryptocurrencies,” fell from over 25% in 2022 to closer to 15% in 2023.

Crypto crime is a continuing problem.
Source: Chainalysis Crypto Crime Report 2023.

Likewise, Chainalysis observed that global revenues from crypto scams declined 29.2% year-on-year as part of a general decrease in crypto crime. Incidentally, the report found that sanctions breaches made up one of the few categories of crypto crime that increased in 2023, with Russian entities driving much of the illegal activity.

Russia Cracks Down on Money Laundering

While European and American anti-money laundering (AML) regulators have sanctioned a string of Russian banks and payment companies in the last 2 years over their connection to the war in Ukraine, internally, the Russian government has undertaken its own AML campaign against organizations suspected of financial crimes.

In 2023, the BoR boasted that 125 criminal cases and more than 620 administrative cases were initiated against alleged fraudsters.

The central bank also reported that it blocked access to 11,200 websites operated by illegal financial market participants and pyramid schemes.

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