Crypto Scams Surge in Russia: Central Bank Report Highlights Sharp Rise in Cryptocurrency Fraud

Crypto Scams Surge in Russia: Central Bank Report Highlights Sharp Rise in Cryptocurrency Fraud

Crypto News – Recent findings from the Central Bank of Russia have brought to light a significant surge in the utilization of cryptocurrency by criminal entities. While such activity was notable in 2022, the year 2023 witnessed an alarming trend where nearly all illicit schemes were crypto-centric.

The report highlighted that in 2023, cryptocurrencies emerged as the predominant tool for “almost all” pyramid schemes and illicit brokerages to perpetrate fraudulent activities.

In its latest assessment, the Central Bank of Russia revealed that in 2022, every other fraudulent investment endeavor in the nation involved the use of cryptocurrency. However, this proportion took a concerning turn in the subsequent year, 2023.

“In 2022, approximately fifty percent of fraudulent investment schemes engaged with cryptocurrency. By 2023, nearly all schemes, including pyramid schemes and illegal brokerages, either solicited investments in internal tokens or accepted contributions in cryptocurrency.”

Statista’s projections indicate that Russia’s annual crypto revenue is poised to reach $2.8 billion by 2028.

In July 2023, BeInCrypto reported President Putin’s signing of the digital ruble legislation. Just a year prior, in July 2022, Putin had enacted legislation banning cryptocurrencies as a means of payment within the country.

However, enthusiasm for the digital ruble among Russians varied. An August 2023 survey conducted by Bankinform unveiled a significant portion of respondents expressing skepticism regarding the digital ruble’s integrity.

The survey disclosed that while 13% of participants were keen on embracing the digital ruble, 34% expressed interest purely out of curiosity, with no intention to utilize it.

In September 2023, crypto exchange Binance declared its departure from the Russian market citing compliance concerns.

Binance subsequently divested its operations to CommEX. Noah Perlman, Binance’s Chief Compliance Officer, articulated:

“As we chart our course forward, we acknowledge that maintaining operations in Russia does not align with Binance’s compliance strategy. We retain confidence in the enduring growth of the Web3 industry globally and will concentrate our efforts on the 100+ other countries where we operate.”

Meanwhile, several Russian parliamentary figures have voiced support for Central Bank Digital Currencies (CBDC) in recent times.

In September 2023, Anatoly Aksakov, head of Russia’s parliamentary financial committee, contended that the role of traditional banks would diminish as blockchain technology increasingly integrates into global financial systems.

He posited that the digital ruble, bolstered by blockchain technology and sophisticated algorithms, could seamlessly undertake the majority of functions currently carried out by banks.