Key Insights:
- Russian lady, Valeria Fedyakina, “Bitmama,” acquired a seven-year jail sentence in Russia for organizing a $23 million Bitcoin pyramid scheme.
- She defrauded buyers by pretending to assist them bypass Western sanctions.
- She was arrested whereas trying to flee to the UAE, and is ready to spend almost ten years behind bars.
Russia reportedly simply witnessed one in every of its largest crypto crime circumstances thus far.
In response to experiences, a self-proclaimed crypto professional generally known as “Bitmama” has been sentenced to seven years in jail. Valeria Fedyakina, a 30-year-old mom from Simferopol, was discovered responsible of defrauding buyers out of two.2 billion rubles (price roughly $23 million or £17 million on the time).
Right here’s how the whole ponzi scheme performed out, and stole tens of thousands and thousands from buyers in simply 2 months.
Russian Girl Steals Thousands and thousands From Traders
In response to experiences, Valeria Fedyakina set herself up as a reliable crypto skilled.
She operated underneath the model names “Bitmama” or “Bitmama Finance,” and claimed to be working a worldwide operation by way of which buyers might convert their funds into crypto offshore (primarily in Dubai). She had a easy marketing strategy, and buyers appeared to purchase it.
Furthermore, she provided to assist shoppers bypass Western sanctions imposed on Russia after its Ukraine invasion, and swap rubles for crypto overseas.
She even went so far as to vow them a small bonus of 1% on each transaction, which appeared to work completely when mixed along with her public picture. Many of those shoppers reportedly handed her bales of money, hoping to benefit from the crypto market growth.
A Pyramid Scheme All Alongside
Behind the scenes, nonetheless, “Bitmama” was working a pyramid scheme.
Relatively than investing consumer funds, she allegedly funneled the cash into her personal crypto wallets within the UAE. In simply 60 days throughout 2023, 4 victims alone misplaced a staggering 2.2 billion rubles.
Stories present that some days noticed transactions as excessive as $15 million. These, which she usually processed in luxurious Moscow lodges the place she organized conferences with shoppers.
In response to the Russian Investigative Committee, Fedyakina pretended to be an investor within the oil, gold and common commodity market. A spokesperson for the committee mentioned she acted with “prison intent to steal cash or crypto by deceiving an ‘indefinite’ variety of folks.”
Tried Escape and Arrest
Her downfall got here, nonetheless, in September 2023. The pyramid scheme had already begun to unravel at this level, and buyers had been changing into suspicious.
Bitmama tried to flee Russia for the UAE, which is understood for its crypto-friendly insurance policies and traditionally unfastened KYC/AML enforcement. Nonetheless, she was arrested on the border, whereas making an attempt to depart the nation.
Reportedly, the Russian lady was six months pregnant on the time, whereas Russian authorities held her in custody. She later gave beginning to her daughter earlier than being imprisoned along with her daughter at Moscow’s SIZO No. 6 detention heart.
The Russian Girl Trial and Sentencing
Final week, nonetheless, the Presnensky District Court docket in Moscow sentenced the Russian to seven years in a penal colony. That is in distinction to the initially sought 10 years from prosecutors underneath Russian fraud legal guidelines.
Along with jail time nonetheless, Bitmama has been ordered to repay the total $23 million in compensation to her victims:
Solely that now, when adjusted for inflation, this determine is now near £20 million. In response to experiences, this incident will not be remoted. There may be an ongoing development during which people and entities in Russia are more and more utilizing crypto to keep away from sanctions and even fund unlawful operations.
A separate Reuters investigation earlier this 12 months confirmed how Russia’s Federal Safety Service (FSB) has allegedly been utilizing Bitcoin to pay younger, inexperienced spies throughout Europe.
Total, whereas Fedyakina “Bitmama” sits in a Russian penal colony, the crypto crime development continues with new circumstances virtually each day.