Russian 'Crypto Expert' Sentenced to 7 Years Over $23M Bitcoin Pyramid Scam

In Brief:

Valeria Fedyakina, aka "Bitmama," defrauded investors of $23M in Bitcoin using a pyramid scheme.

Sentenced to seven years in prison and ordered to pay full compensation to victims.

Valeria Fedyakina, a self-styled "crypto expert" from Simferopol, Russia, has been sentenced to seven years in prison for masterminding one of Russia's largest recent crypto frauds. Operating under the name "Bitmama," she convinced investors that she could transfer their money abroad via cryptocurrency to avoid Western sanctions. Instead, she funneled the funds into her own crypto wallets, amounting to a total of $23 million in Bitcoin over 60 days in 2023.

The fraud was particularly attractive amid the tightening of Russian banking access due to sanctions. Moscow's Presnensky District Court sentenced Fedyakina to serve time in a penal colony, and she was ordered to repay the full amount to her victims. The case highlights growing concerns over the use of cryptocurrencies in illicit activities, particularly amid weak regulatory enforcement in jurisdictions like the UAE, where Fedyakina funneled funds.

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