The Bank of Russia said in its latest report that financial fraud involving cryptocurrency-related elements will increase in 2023. illegal activityIncluding financial pyramids, the number of confirmed cases increased by 15.5% compared to the previous year, reaching 5,735.
Online fraud surges as cryptocurrency takes center stage
that much report This highlights the growing trend of illegal participants in the financial market using cryptocurrency. By 2022, every second similar investment project involved a cryptocurrency, and by 2023, almost every financial pyramid and illegal broker offered investments in domestic tokens or accepted donations in cryptocurrencies, the bank claims.
According to the report, these fraud It is mainly operated as a ‘small-scale quasi-investment project’ created and carried out online. Reach is expanded through social networks and messaging app Telegram, and organizers actively engage “popular lifestyle bloggers” for advertising purposes.
Moreover, cross-border payment services and cryptocurrencies have emerged as the most popular ways to transfer funds to these pyramids.
The report found that more than 45% of the identified frauds encouraged investors to use foreign payment service systems. At the same time, around 1,500 fraudulent projects were accepting cryptocurrency donations, allowing organizers and beneficiaries to keep their funds. anonymous.
To address the continued presence of these illicit activities, the Bank of Russia has taken steps to restrict access to domains and subdomains used by entities involved in illicit financial activities.
According to central bank of russia, scammers often create duplicate resources after the main site is blocked. By 2023, more than 1,500 financial pyramids had their domains and subdomains blocked using this mechanism.
Additionally, nearly 44% of illegal lenders advertised their services solely online, utilizing social media pages, groups, and popular advertising platforms without a physical office.
crackdown on illegal financial activities
Russian banks have also observed a decline in organizations providing loans secured by real estate, which indicates a downward trend in this sector. The regulator also identified 820 illegal forex dealers and 42 illegal brokers and managers.
Many of these companies are known to lure customers by creating the illusion that they are bidding on foreign forex sites. Manipulated ratings that mix legitimate participants with illegal organizations further mislead consumers. In 2023, the Bank of Russia identified 48 such locations.
Responding to the activities of illegal organizations, financial pyramidThe Bank of Russia has recommended that credit institutions apply anti-money laundering (AML) legislation against entities registered as engaging in illegal activities in financial markets.
The measures aim to shorten the life of financial pyramids, disrupt the financing of illicit financial service providers and minimize the harm caused to citizens by such schemes.
To strengthen its efforts, the Central Bank shares information about identified illegal participants and financial pyramids with law enforcement agencies, the Federal Antimonopoly Service of the Russian Federation (FAS Russia) and the Federal Service for Supervision of Communications, Information Technology and Mass Media (Roskomnadzor). ).
As of 2023, more than 125 criminal cases, more than 620 administrative cases have been filed and more than 1,300 other response measures have been implemented due to the actions of Russian banks.
Additionally, access to more than 11,200 online resources belonging to illegal participants and financial pyramids was restricted.
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