A Moscow court has handed down a seven-year prison sentence to Valeria Fedyakina, a Russian woman implicated in a cryptocurrency scam that allegedly swindled investors out of $23 million in Bitcoin within a mere two-month period.
Fedyakina, who presented herself as a cryptocurrency authority, was found guilty of orchestrating what prosecutors labelled as a pyramid scheme aimed at investors during 2023. She was charged with false promises of rapid returns through digital asset transactions while systematically stripping her clients of their funds.
Moscow Court Sentences ‘Bitmama’ to 7 Years Over $23M Bitcoin Scam
The fraudulent operation reportedly affected at least four identifiable victims, amassing around 2.2 billion rubles, roughly equivalent to £17 million at that time, as reported by The Telegraph.
Fedyakina allegedly convinced her clients that their investments would be converted to cryptocurrency in Dubai, a move purportedly designed to help them sidestep Russian sanctions. In exchange, she promised a 1% bonus on the transferred funds.
However, investigators assert that the anticipated returns never materialized, and the money vanished shortly after the clients made their transfers. A spokesperson for Russia’s Investigative Committee stated that Fedyakina’s actions were clearly intended to deceive.
“Fedyakina had a criminal intent to steal money or cryptocurrency by deceiving an indefinite number of people,” the representative explained. “She did this under the pretext of investing in her ventures related to transportation, oil, gold, and other minerals.”
While Russian media reports did not tie the embezzled funds to any specific international entity, some foreign sources speculated that prosecutors suspected a portion might have found its way into Ukraine. These claims remain unverified, and local media have not corroborated them.
Fedyakina’s legal representatives denied the fraud allegations, claiming that she supported Russia’s military efforts and expressed a willingness to assist the armed forces financially.
Her arrest occurred in 2023 as she attempted to flee to the United Arab Emirates while she was six months pregnant. Following her detention, she gave birth in a maternity hospital before being returned to custody.
On June 24, the Presnensky District Court in Moscow affirmed her sentence. Despite her appeals, Fedyakina was ordered to serve seven years and repay 2.2 billion rubles to her victims. Due to inflation, this amount is now approximated at £20 million.
Fedyakina had marketed herself as “Bitmama,” claiming to operate on a global scale and promising substantial returns in cryptocurrency.
Prosecutors contended that her promises were merely a facade used to deceive investors and pilfer their funds under the guise of sanction-proof trading.
This case represents one of the most significant instances of cryptocurrency fraud in Russia in recent years, highlighting the increasing scrutiny facing unregulated crypto ventures in the country.
Russia Intensifies Crypto Crackdown with Arrests, Seizures, and Hydra-Linked Investigations
The conviction of Fedyakina, dubbed a “crypto expert,” is part of a wider initiative by Russian authorities to combat crimes related to cryptocurrencies.
In recent months, Russian law enforcement has intensified efforts to track, seize, and prosecute cryptocurrency assets tied to illegal activities. On June 2, authorities confiscated $8.2 million worth of cryptocurrency from Dmitry Pavlov, a prominent figure in the now-dismantled Hydra darknet market.
Pavlov has acknowledged his role in managing the platform’s servers, reportedly earning a crypto “salary and bonuses” while maintaining Hydra’s operational infrastructure. Prosecutors allege he held the coins in anticipation of price increases rather than converting them into fiat currencies.
Hydra, which once held a leading position in the darknet ecosystem, is believed to have facilitated over $5 billion in cryptocurrency transactions prior to its closure. In December, a court in Moscow sentenced 16 individuals connected to Hydra, including the mastermind Stanislav Moiseev, who received a life sentence.
Stanislav Moiseev, the mastermind behind the notorious online black market Hydra, has been handed a life sentence by a Russian court. #Hydra #Crypto https://t.co/9uuAfft63K
— Finance Newso.com (@Finance Newso) December 4, 2024
The crackdown has also encompassed illegal cryptocurrency mining operations. On June 3, police in the Amur Oblast seized ₽7 million (~$88K) in Bitcoin from a former power company employee caught operating unauthorized mining equipment.
Shortly after, officials shut down a large-scale mining facility in Krasnoyarsk Krai that was reportedly generating over ₽4.6 million (~$58K) monthly by exploiting state-owned land.
Together, these arrests, asset seizures, and undercover operations illustrate the deepening connection between cryptocurrency and illicit activities in Russia and the determined stance taken by authorities in response to this growing issue.
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