Russia registers steep drop in financial fraud losses in 2016

Maria Nikolova

The drop may be attributed to tightening of Russian laws, which currently envisage a sentence of up to 6 years in prison for financial pyramid architects.

Russians have lost RUB 2 billion (USD 33.6m/EUR 31.6m) due to activities of fraudulent financial schemes in 2016. This compares to losses of RUB 5.5 billion incurred in 2015.

The numbers were reported by Russian newspaper “Izvestia”, quoting Valeriy Lyakh from the Central Bank of Russia.

The number of financial pyramids uncovered by the Central Bank of Russia last year was around 180, compared to 200 in 2015.

Amid the factors for these results are the amendments made to Russian laws – in May 2016, the criminal code was toughened with regards to financial crime. As per the amendments, organization of a financial pyramid entails a prison sentence of up to 6 years and a fine of up to RUB 1.5 million.

What is the situation in the Russian Forex market?

According to numbers, provided by Russian newspaper “Kommersant”, the Bank of Russia received 210 client complaints against Forex companies registered overseas in 2016. This is slightly down from the 236 complaints received in 2015.

Under the Forex law, which Vladimir Putin signed in the end of 2014, foreign corporate entities are not permitted to offer/promote their services to Russian clients from October 1, 2015. Russian FX firms that do not have a Forex dealer license and are not a member of a Russian Forex self-regulatory organization, are not allowed to advertise and offer their services to Russian clients either.

Until this point, only six FX firms have obtained the coveted Forex dealer licenses in Russia – Alpari Forex, VTB 24 Forex, Teletrade Group, TrustForex, Finam Forex, Forex Club. According to the nation’s financial “Megaregulator”, companies are not in a hurry to apply: in total, 10 companies have filed for such regulatory permissions.

The reasons for this reluctance include the stringent requirements for securing an FX dealer license – for instance, a minimum capital requirement of RUB 100 million (USD 1.68m/EUR 1.58m). The financial bill grows further once the expenses for software and accounting equipment – which may reach RUB 12 million a year, are factored in. Then, there is also an initial membership fee for the Compensation Fund, which stands at RUB 2 million…

The Forex sector has stalled in regulatory terms thanks to a bureaucratic formality, which requires FX dealers to comply with a set of basic standards. The document explaining what these basic standards should be was published by the Central Bank in November 2016, with the date for the rules to come into effect yet unknown – experts outline different time for this but agree that this should happen at some point in 2017.

Read this next

Digital Assets

Terra founder Do Kwon arrested in Montenegro

Terra (LUNA) co-founder Do Kwon, the South Korean entrepreneur facing charges over the $40 billion wipeout of the stablecoins he created, was reportedly arrested in the region of Podgorica, Montenegro.

Metaverse Gaming NFT

Orbs Ecosystem Developers Launch TON Access To The Public

The TON Access service provides reliable and decentralized RPC nodes to decentralized applications (dApps).

Digital Assets

Bybit celebrates listing of Arbitrum (ARB) token with $400K prize pool

“At Bybit, we recognize our responsibility to provide forward-thinking opportunities for our users and lead the way in supporting the proliferation of cryptocurrency and blockchain technology.”

Digital Assets

StormGain launches StormGain DEX, a non-custodial alternative to its centralized exchange

StormGain DEX becomes accessible once a user connects their own non-custodial wallet and trades directly, with all orders settled on-chain.

Retail FX

OANDA launches CFDs on UK and US stocks for retail clients in emerging markets

“Interest in CFDs has been surging globally as they offer traders and investors the opportunity to profit from price changes without owning the underlying assets. CFDs give exposure to markets that are trending downward as well as upward, allowing traders to take positions even when volatility is high.”

Institutional FX

Bitpanda’s stocks, commodities, crypto now available to banks partnered with Visa

“We are excited to welcome Bitpanda to Visa’s Fintech Partner Connect Program. The partnership will assist banks to integrate an asset trading platform for crypto and other assets within their banking app.”

Industry News

Exchanges agree on global framework for designating stocks and shares as green

“Investors should be able to have greater visibility of issuers who have green activities in a way that is rigorous and that counters greenwashing. Exchanges strive to bring clarity, consistency, and rigor to the concept of green and to counter greenwashing.”

Institutional FX

90% UK participants worry of trade failures, penalties, inefficiencies arising from US move to T+1

“By embracing automation and digital transformation, firms can enhance their middle- and back-office systems and gain a competitive edge”, said Brian Collings, CEO, Torstone Technology.

Industry News

Lindsay Lohan, Jake Paul, Soulja Boy, Kendra Lust, Ne-Yo, Akon charged by SEC in crypto fraud case

“Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.”