Chainalysis, a blockchain data platform that provides software, services, and research services for government agencies and companies, has released a data about the current state of crypto crime in Eastern Europe.
The region is known to be one of the most crypto-forward regions in Europe, and along with its openness in cryptocurrencies is the rise of illegal activities related to the digital asset.
Most of the illegal activities in Eastern Europe are connected in the Finiko pyramid scheme which, according to Chainalysis, has funneled $1.5 billion worth of bitcoin through more than 800,000 deposits.
The exact figures are yet to be confirmed, but if the figure has indeed reached $1.5 billion, the Finiko pyramiding scam would be the largest crypto fraud in history. It has even surpassed the OneCoin scam, which had funneled $4 billion.
‘Pyramids’ in Russia
One of the often used tactics in pyramiding schemes is aggressive recruiting which is designed to attract more investors. The reason why participants of these schemes are growing so fast is that existing members are motivated by the financial reward of bringing new investors.
And since the citizens of Russia and Ukraine are currently suffering from currency devaluation and limited opportunities, they are prone to get rich-quick schemes.
When Finiko was launched, it didn’t rouse any suspicion from anybody, but by the end of 2020, authorities began looking closely at this financial service because of its alleged signs of a pyramid scheme.
Finiko founder arrested
Finiko founder Kirill Doronin was later arrested by authorities because of Finiko’s clear red flags. They immediately confiscated his Russian and Turkish passports. He will be released at the end of September.
He cooperated with the authorities by providing information about Finiko’s co-founders Zygmunt, Zygmuntovich, Edvard, and Sabirovy. But he made it clear that he doesn’t know their current whereabouts.
Image courtesy of Cointelegraph News/YouTube
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