Key Participant in Finiko Ponzi Scheme Sentenced to Three Years

Key Participant in Finiko Ponzi Scheme Sentenced to Three Years

Vakhitovsky District Court of Kazan has sentenced Lilia Nuriyeva, a significant figure in the infamous Finiko Ponzi scheme, to three years in prison.

Nuriyeva was found guilty of defrauding private investors and being part of an organized criminal network, underscoring the severity of the charges against her.

How the Finiko Crypto Ponzi Scheme Defrauded Investors of $55 Million

Finiko, likened to the notorious MMM Ponzi scheme, attracted investors with promises of high returns through a supposedly innovative cryptocurrency and stock market trading system. The scheme, led by Kirill Doronin, operated from 2018 until its downfall in 2021, leaving significant financial destruction in its wake.

The Ministry of Internal Affairs reported that the scheme resulted in damages exceeding 5 billion rubles (approximately $55 million).

Investigations revealed that Doronin and his collaborators traveled across Russia, hosting master classes to draw in thousands of investors. They promised substantial profits through an “automatic profit generation system,” convincing people to invest by taking out loans and selling their homes.

Initially, investors received dividends paid in Bitcoin, which they could withdraw. However, the introduction of Finiko’s cryptocurrency saw its value plummet within a month, wiping out investors’ savings.

In 2021, the Central Bank identified Finiko as a financial pyramid and listed it among companies showing signs of illegal activity. Despite this warning, the scheme continued to attract significant investments until its sudden collapse.

As offices nationwide closed and the company’s website went offline, Doronin assured investors it was a technical issue. However, investigators later discovered that his associates had fled abroad with the funds.

One investor, Lyudmila Yamshchikova from Kazan, shared her experience with the Russian outlet Izvestia:

“Payments suddenly stopped. I invested nearly a million rubles, intending to use the interest to pay off my mortgage. Half of the city was buying apartments, cars, and paying off loans. But then withdrawals were blocked,” Yamshchikova said.

Nuriyeva received a relatively lenient sentence due to a pre-trial agreement, reducing her time in prison to three years from the initially possible ten years.

Currently, Doronin and nine other accomplices are in pre-trial detention. They face charges of organizing and participating in a criminal community and large-scale fraud. The General Prosecutor’s Office approved their indictment, and the case was sent to the Vakhitovsky Court on April 27.

The Financial Crimes and Enforcement Network (FinCEN) identified Finiko as one of Bitzlato’s top three receiving counterparties. Bitzlato, a Russian peer-to-peer exchange, saw its founder charged with money laundering by the US in 2023.