More and more financial and cryptocurrency pyramids aimed at Russian investors are opening physical offices in the country. Russia’s central bank recently expressed concern about the trend, which is seen as evidence that scammers expect demand to rise.
Ponzi schemes and illegal forex dealers in Russia, many of which currently specialize in cryptocurrency investments and settlement opportunities, are going offline, Izvestia reports, citing the Central Bank of the Russian Federation (CBR).
For the first time in recent years, the organizers of such scams are opening offices where they are trying to convince potential victims to invest in virtual money or offer services to circumvent foreign sanctions and government restrictions. Experts say that personal contact is always more effective for this purpose.
They also warn that sharing information with dubious platforms often results in the loss of funds, both fiat and crypto. The offline trend indicates that scammers are preparing for increased demand as Russians’ access to global financial assets has become extremely problematic, the report notes.
The sanctions imposed by the West in connection with the military operation in Ukraine, and the currency restrictions imposed in response by the Russian authorities, have increased interest in crypto assets. Many Russians buy bitcoin (BTC) or other cryptocurrencies and stablecoins to protect their funds from sanctions or transfer them abroad.
Crypto scams are on the rise due to sanctions and restrictions
According to data collected by the Bank of Russia, financial pyramid schemes have significantly intensified this year. In the first half of 2022, the regulator identified 954 such entities, compared to 146 in the same period last year. This is more than a sixfold increase.
The number of those who offer investments in real or fake cryptocurrencies also continues to grow. More than half of the registered fraudulent schemes (56%, or 537 entities) raised funds in various digital assets or advertised investments in them.
The Russian Monetary Authority believes that fraudsters are taking advantage of the fundamentally changed operations of traditional financial institutions as a result of sanctions affecting international settlements and investments in foreign assets.
The CBR recently eased some of its restrictions on access to foreign fiat currencies for Russian citizens, allowing banks to increase the supply of USD and EUR cash to the public. It is not yet clear how this change will affect interest in cryptocurrency, which, according to a recent survey, remains relatively high in Russia.