The Russian Central Bank has observed a significant year-on-year increase of financial scams incorporating cryptocurrencies, with a nearly 16% rise in 2023 compared to the previous year.
Uptick in Crypto-Related Financial Fraud
According to the Central Bank, the majority of financial scams now have a crypto-related aspect. In 2023, it was noted that nearly all pyramid schemes and unlicensed brokers offered investments in crypto assets or accepted cryptocurrency payments.
The Central Bank identified 5,735 entities, including companies, projects, and individual entrepreneurs, displaying signs of illicit activities, many of which were indicative of financial pyramids.
Shorter Lifespan of Scam Projects
The lifespan of scam projects is reportedly becoming shorter, resulting in less financial harm to victims on average.
More than 11,200 web pages associated with illegal financial activities, including financial pyramids, have been blocked to prevent public access in Russia. Legal authorities initiated 620 administrative cases concerning suspicions of financial improprieties.
The Central Bank is collaborating with the Federal Antimonopoly Service and Roskomnadzor, the national censorship body, to combat these scams.
Types of Crypto Scams Identified
A list of suspected financial scams revealed by the bank includes social media chatrooms, crypto-related games, potentially fake exchanges, and scams involving crypto trading bots, as well as companies allegedly running crypto mining scams.
A prominent crypto scam warning issued by the Russian Central Bank in January 2023 revolved around a scheme tied to the popular TV series “The Boy’s Word: Blood on the Asphalt” (Slovo Patsana).