Russian citizen Valeria Fedyakina (AKA "Bitmama") recently received a seven-year prison sentence for planning out a $23 million Bitcoin scam.
Fedyakina pretended to be a crypto expert with "Bitmama Finance" and lured wealthy clients in before scamming them.
The scam worked through informal meetings in luxury hotels and moved as much as $15 million per day before collapsing.
Her case shows how crypto is being used to bypass state sanctions and move illegal funds around.
The sentencing also comes just as Russia is looking into carefully regulated crypto instruments.
Russia recently experienced one of its most notorious cryptocurrency fraud cases to date.
30-year-old Valeria Fedyakina, known online as “Bitmama” has just been sentenced to seven years in a penal colony for organizing a massive Bitcoin scam that ripped investors off a staggering $23 million (approximately £17 million):
In just two months.
Here’s how what started as a polished crypto investment scheme quickly turned into a massive pyramid scheme in only a few months.
Fedyakina, according to reports, is a mother from Simferopol. She set herself up as a crypto expert with a worldwide reach and created an image of a successful businesswoman running “Bitmama Finance.”
Fedyakina claimed to help wealthy clients convert their rubles into crypto through offshore deals.
Her pitch was simple: Send your funds to Dubai, where they will be converted into Bitcoin or other cryptos, and bypass Western sanctions.
Victims were even promised a 1% bonus on their deposits once the transactions were complete.
However, none of it was real. The money vanished almost immediately after being handed over, and Fedyakina only grew richer.
According to Russian prosecutors, Fedyakina operated her scam through informal, in-person meetings held in luxury hotels across Moscow.
Her assistant later revealed that clients initially brought in $2–3 million per day, which is an amount that soon grew to as much as $15 million per day.
Rather than investing the funds, Fedyakina routed them to crypto wallets in the UAE.
Once in the UAE, she pocketed it all while pretending to be financing oil, gold and mineral trades. The scam was fast, highly organized and ruthlessly efficient.
Until the law caught up.
The entire pyramid came crashing down by September 2023. And by that point, four known victims had already been scammed of a combined total of 2.2 billion rubles.
Fedyakina herself was arrested at the border after attempting to flee to the UAE.
Interestingly, at the time of her arrest, she was six months pregnant and gave birth to her daughter in a special maternity hospital.
Before being sent to Moscow’s SIZO No. 6 detention facility right after.
On 24 June of this year, the Presnensky District Court in Moscow handed down a seven-year prison sentence to Fedyakina.
On top of this, she was also ordered to pay the full 2.2 billion rubles, which are now valued at closer to £20 million as compensation to her victims.
Fedyakina’s case has much wider implications than mere fraud.
It shows just how crypto is now being weaponized to bypass state sanctions and hide illegal fund movements.
According to reports from blockchain analysts and intelligence agencies, there are several similar instances of Russian authorities using Bitcoin to finance espionage operations.
In fact, a recent investigation from Reuters showed that Russia’s Federal Security Service (FSB) used Bitcoin to pay young, untrained spies operating in Europe.
Interestingly, this case comes at a time when Russia is slowly opening the door to regulated crypto instruments.
In May of this year, the Bank of Russia allowed financial institutions to offer crypto-linked derivatives to qualified investors.
While these instruments must be “non-deliverable” (meaning they can’t be settled in actual crypto), it shows that the Russian government is now viewing crypto as a legitimate asset class.
Overall, while the seven-year sentence and $23 million restitution order may provide some closure to victims, the damage has already been done.
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