The Central Bank of Russia Reports Increase in Financial Fraud Schemes
The Central Bank of Russia has revealed that almost half of the financial fraud schemes in the country last year involved cryptocurrency and foreign currencies for payments. In a report on the surge of scams, the central bank identified 5,735 entities involved in fraudulent activities in 2023, a 15.5% increase from the previous year. However, while the prevalence of these schemes has grown, their duration has decreased and associated losses have diminished.
Cryptocurrency and Foreign Currencies Preferred Payment Method for Scams
Out of the 5,735 scams identified, 2,944 were financial pyramid schemes, with cryptocurrencies and foreign currencies being the preferred payment method, accounting for 45% of payments. Additionally, data shows that nearly 1,500 scam schemes used cryptocurrency for donations, representing 26% of total scams. This pattern takes advantage of blockchain’s anonymity.
Anonymity Concerns and Criticisms
Crypto’s heightened anonymity facilitated by blockchain technology has raised concerns among world leaders critical of cryptocurrencies. Microsoft founder Bill Gates expressed his disapproval in 2018, stating that cryptocurrency’s anonymity makes it difficult for law enforcement to track criminals. The president of the European Central Bank, Christine Lagarde, claimed that Russia was using cryptocurrencies to evade Western sanctions. However, some crypto industry leaders argue that fiat currencies are also used for financial crimes and highlight that Bitcoin is traceable while cash is not.
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