Crypto involved in almost half of Russia’s financial scams last year, says Russian Central Bank
The Central Bank of Russia has revealed that almost half of the financial fraud schemes in the country last year utilized cryptocurrency and foreign currencies for payments. The disclosure was made in a report by the central bank, which highlighted the surge in scams and outlined strategies to combat the escalating issue. The report identified 5,735 entities involved in fraudulent activities in 2023, representing a 15.5% increase from the previous year. However, despite the growing prevalence of these schemes, they have been lasting for shorter periods of time and the associated losses have decreased.
Out of the 5,735 scams, 2,944 of them were financial pyramid schemes, up from 2,017 in 2022. The central bank confirmed that cryptocurrencies and foreign currencies were the preferred payment methods for these pyramid scams, accounting for 45% of payments. Additionally, data showed that nearly 1,500 scam schemes, representing 26% of the total, used cryptocurrency for donations in an attempt to exploit the anonymity provided by blockchain technology.
The heightened level of anonymity facilitated by blockchain has raised concerns among numerous world leaders critical of cryptocurrencies. Despite arguments that crypto is not as anonymous as believed, the use of crypto mixers like Tornado Cash has only intensified these concerns. Bill Gates, the founder of Microsoft, expressed his reservations about the anonymity of cryptocurrency in an AMA session on Reddit in February 2018, stating that it hampers law enforcement’s ability to track criminals. Christine Lagarde, the president of the European Central Bank, also claimed in March 2022 that Russia was using cryptocurrencies to evade Western sanctions. Moreover, members of the Silk Road black market turned to Bitcoin for transactions to enhance their anonymity.
Despite these concerns and various use cases, some leaders in the crypto industry argue that fiat currencies are also commonly used for financial crimes. Former ex-CEO Changpeng Zhao argued last year that Bitcoin is traceable, while cash is not.
