“Almost All” Financial Scams In 2023 Involved Crypto, Russian Central Bank Report States

The Bank of Russia recently reported that "almost all" financial scams in 2023 involved crypto in pyramid schemes and illegal brokerages.
“Almost All” Financial Scams In 2023 Involved Crypto, Russian Central Bank Report States

Key Insights

  • The Bank of Russia recently reported that "almost all" financial scams in 2023 involved crypto in pyramid schemes and illegal brokerages.
  • The Bank of Russia states that scammers target investors through platforms like Telegram, promising high profits.
  • Crypto allows these scammers to evade detection and move funds across borders.
  • The central bank blacklisted websites blocked access to resources and initiated legal action against these offenders throughout 2023.

The Bank of Russia warns citizens to be wary of online investments, especially those that have to do with crypto and unrealistic promises.

The Bank of Russia has issued a warning about a spike in financial scams involving crypto in 2023.

In addition, the Bank of Russia also states that in 2023 "almost all pyramid schemes" had something to do with crypto.

The central bank found a staggering 5,735 instances of illegal activity in the financial industry, up 15.5% from 2022, according to its most recent report. The study also showed that nearly every financial pyramid and illegal brokers operated in one way or another, with crypto.

The Crypto Scam Situation

According to the report, the majority of crypto scams work via the internet, enticing investors with the promise of huge profits.

These scams find new victims using chat services like Telegram and other social media sites, and use well-known bloggers to give themselves a false look of legitimacy.

"In 2022, every second pseudo-investment project attracted cryptocurrency.

In 2023, almost all pyramid schemes and illegal brokers offered investments […] in cryptocurrency."

According to the report, using crypto in their activities gave these scammers anonymity, and allowed them to escape regulatory probes.

Moreso, almost 1,500 of the scams took Bitcoin contributions, and over 45% of them urged investors to use other international payment methods.

The number of financial pyramid entities identified
The number of financial pyramid entities identified

According to the study, in 2023, the central bank blacklisted over 1,500 financial pyramid websites and their subdomains. The report admitted, though, that scammers frequently launched new websites once the initial ones were taken down.

Furthermore, according to the study, in 2023 the central bank discovered 42 unauthorized brokers and managers, as well as 820 unauthorized FX dealers.

Many of these businesses tricked clients by claiming to provide access to international forex websites and using fake service ratings to enhance their credibility. The report included a list of 48 such fake sites that the central bank found.

Prosecution For These Crypto Scams

Moreover, credit institutions have been advised by the central bank to enforce anti-money laundering (AML) regulations against entities that are involved in illegal operations inside the financial industry.

This aims to reduce the impact that financial pyramids and other illicit service providers impose on Russian citizens, by interrupting their cash flow.

In an effort to combat crypto fraud, the central bank is also working with law enforcement organizations, the Federal Antimonopoly Service of Russia, and the Federal Service for Supervision of Communications, Information Technology, and Mass Media.

According to the report, in 2023, the central bank's actions led to over 620 administrative proceedings and over 125 criminal charges against financial pyramids and illegal participants.

Additionally, the study stated that access to over 11,200 web resources owned by fraudsters has been blocked.

All things considered, The Bank of Russia urged the public to exercise caution while interacting with online investments, especially those related to cryptocurrencies.

The public has also been warned by the central bank to be cautious of the dangers associated with the crypto market and to resist giving in to unreasonable claims of huge returns on investment.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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