Nearly all financial scams in Russia are now intertwined with cryptocurrencies, according to a new report issued by the Central Bank of Russia. The government institution says there has meanwhile been a 15.5% spike in all entities flagged for illegal activities, adding up to 5,735 in 2023.

Of particular concern is the surge in financial pyramid schemes—where returns are paid to earlier investors from funds contributed by new investors—and crypto’s increasing role.

“In 2023, almost all pyramid schemes and illegal brokers offered investments in internal tokens or accepted contributions in cryptocurrency,” The Central Bank wrote in Russian, translated by Decrypt via Google Translate.

Crypto is an appealing ingredient given the promise of anonymity and borderless transactions .In total, the Central Bank identified 2,944 crypto pyramid cases, adding up to 150% growth from the previous year.

Other key findings include the rise of ‘pseudo-brokers’ —entities falsely presenting themselves as professional securities market participants—such as illegal foreign exchange dealer

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Author: Jose Antonio Lanz

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