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arrests, Crypto, crypto pyramid, Cryptocurrencies, Cryptocurrency, Dagestan, detainees, financial pyramid, Finiko, Fraud, organizers, Ponzi Scheme, Pyramid, Russia, russian, tatarstan, Yusra Global
Russian law enforcement agencies have gone after the organizers of a large crypto pyramid which has been promising extraordinarily high returns. The Ponzi scheme is being unraveled after a similar project defrauded thousands of investors in Russia, the region, and far beyond.
Officers from the Federal Security Service (FSB) and the Ministry of Internal Affairs in the Russian republic of Dagestan have identified persons suspected of organizing a major financial pyramid offering victims profits of up to 500% per year on their investments in digital assets.
According to sources quoted by the Russian business daily Kommersant, the suspects are representatives of the Yusra Global project, Forklog reported. Besides Dagestan, the fraudulent entity had established offices in other Russian regions, Kazakhstan in Central Asia, and Turkey.
The publication reveals that the authorities have detained four people in January, all Russian citizens, who are believed to be behind the Ponzi scheme. They were initially placed under arrest for a period of two months. The defendants may face up to ten years in prison on top of hefty fines.
The perpetrators of the fraud were inflating quotes of values of digital assets and paid out dividends using the funds invested by new participants in the pyramid, the report detailed. They distributed the rest of the money amongst themselves and purchased real estate.
Preliminary estimates suggest the victims’ losses amount to 1 billion rubles, or more than $10 million according to current exchange rates at the time of writing, the Russian newspaper revealed.
The news about the investigation into Yusra Global comes after last year, when Russian authorities busted arguably the country’s largest financial scam since the notorious MMM pyramid in the 1990s.
Finiko, also a Ponzi scheme exploiting the rising popularity of cryptocurrencies, is responsible for the loss of up to $4 billion in total. Its founder Kirill Doronin — a social media influencer linked to other scams in the past — and a number of his accomplices were arrested.
Citizens of Russia, Ukraine, and other countries in the former-Soviet space, EU member states, and the U.S. are among the people who sent 800,000 separate crypto deposits to the phantom entity. The pyramid, which was based in another Russian republic, Tatarstan, received over $1.5 billion worth of bitcoin in less than two years, according to Chainalysis.
Do you expect Russian authorities to target other financial pyramids related to crypto investments? Tell us in the comments section below.
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