Russian police take cryptocurrency fraudsters to court

Maria Nikolova

The three arrested men are accused of illegal banking via an international payment system and a Bitcoin exchange platform.

Russian police have arrested three men accused of generating illegal income through a cryptocurrency scheme. “Officers of the Criminal Investigation Administration of the Russian MIA Administration for the Kostroma Region together with the Russian FSB Administration for the Kostroma Region apprehended three gang members involved in illegal banking through using an international payment system and a bitcoin exchange platform,” said Russia’s MIA official representative Irina Volk.

In order to organize a virtual exchange service, the malefactors had registered over 300 bank cards and SIM cards in their relatives and acquaintances’ names and then conducted cryptocurrency exchange operations and transfers through those cards. According to the investigators, the three men in question had illegally cashed out more than RUB 500 million ($8.65 million) through Internet accounts and profiles registered in dummies’ names.

In the course of the investigation, the police identified and questioned 400 witnesses and carried out nearly 30 expert examinations. During the searches, policemen seized computer media presumably containing information about the malefactors’ illicit activity.

The Investigation Unit of the Investigation Administration of the Russian MIA Administration for the Kostroma Region have charged the defendants with law violations subject to Part 2 Article 172 of the Criminal Code of the Russian Federation. The court has issued a restraining order to the detained men. At the present moment, the materials of the criminal case have been sent to the court for consideration on the merits.

The actions of the Russian police underline a sharp change of attitude towards Bitcoin and its likes by Russian authorities. Yesterday, the Bank of Russia, which had been warming up to crypto currencies and had even indicated its interest in launching a national virtual currency, issued a stark message with regard to crypto currencies. The announcement, which reiterated a warning the central bank issued back in 2014, said that the risks associated with the use of crypto currencies are too high. The “Megaregulator” said it was premature to allow any crypto currencies along with any financial instruments linked to crypto currencies to the exchanges and regulated markets or the payment structures of the Russian Federation.

In May this year, Marat Safiulin, who heads the Federal Public-State Foundation for the Protection of Investor and Shareholder Rights, quoted estimates showing that every 48 hours, a new financial pyramid emerges in Russia. Fraudulent schemes involving crypto currencies are of particular concern for the expert who forecast that these will spread further in the future. Most of them operate as “hyip” businesses promising artificially high returns, he noted back then.

Read this next

Digital Assets

Valkyrie pulls back on Ether futures merge with Bitcoin ETF

Valkyrie Funds LLC will suspend the purchase of Ether (ETH) futures contracts for its Valkyrie Bitcoin and Ether Strategy ETF (BTF.O). Additionally, the firm will unwind any positions in Ethereum that it has already acquired.  

Digital Assets

Hong Kong police arrest 18 in $1.5B billion JPEX fraud

The investigation into the JPEX crypto exchange scandal continues to unfold as Hong Kong and Macau police arrest four more individuals. These arrests, which include individuals considered “relatively close to the core” of the scandal, bring the total number of detentions to 18.

Digital Assets

Gemini tells Dutch users to withdraw assets by November 17

Gemini, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss, announced that it will cease providing services to customers in the Netherlands, citing regulatory requirements imposed by the country’s central bank.

Digital Assets

SEC puts BlackRock, Valkyrie, and Bitwise Bitcoin ETFs on hold

The U.S. Securities and Exchange Commission has delayed its decisions on several bitcoin exchange-traded fund (ETF) proposals, leaving many in the crypto industry feeling pessimistic for any future blessing from the agency.

Digital Assets

Ripple backs out of Fortress Trust acquisition

Ripple has decided to cancel its planned acquisition of Fortress Trust, a custodian company, less than a month after initially announcing the agreement.


France regulators blacklists 21 FX brokers, FuturBTC

France’s financial markets regulator, the Autorité des Marchés Financiers (AMF), today shed light on several unregulated forex brokers representing their offering under several brands. Notably, the AMF has identified only one crypto-assets provider in its latest warning.  

Digital Assets

Flare and Arkham Collaborate for Enhanced Decentralized Data Access

Flare’s blockchain for decentralized data acquisition integrates with Arkham’s Intelligence Platform, offering users advanced analytics and actionable on-chain insights.

Industry News

iFX EXPO International 2023 Successfully Concludes

The most talked about financial event of the year took place in Limassol, Cyprus.

Retail FX

Plus500 Forex Garners Market Attention In The Latest Expert Ranking

Securing the 58th spot in Traders Union’s Best Forex Brokers of 2023 ranking, Plus500, despite its cautionary overall score of 6.3 out of 10, stands out for its stringent regulatory compliance, user-centric WebTrader platform, and a commendable focus on account security, though it lags in providing advanced trading tools and trust management features.