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Crypto Sector Faces Major Accusation from Russia’s Central Bank

2 mins
Updated by Kyle Baird
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In Brief

  • Central Bank of Russia notes sharp rise in criminal use of cryptocurrency.
  • "Almost all" illegal schemes in 2023 involve cryptocurrency, per report.
  • Binance exits Russian market over compliance issues, signaling shifting crypto landscape.
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The recent report from the Central Bank of Russia underscored a notable uptick in criminals adopting cryptocurrency. While the numbers were significant in 2022, nearly all fraudulent schemes in 2023 were crypto-related.

It was noted that in 2023, cryptocurrencies were the primary tool for “almost all” pyramid schemes and illegal brokerages to carry out their fraudulent activities.

Crypto Scams Increase in Russia, According to Central Bank

In a recent report, the Central Bank of Russia observed that in 2022, every other fraudulent investment project in the country used cryptocurrency. However, the ratio worsened in the following year, 2023.

“In 2022, every second pseudo-investment project attracted cryptocurrency. In 2023, almost all pyramids and illegal brokers offered investments in internal tokens or accepted contributions in cryptocurrency.”

Statista forecasts that by 2028, the annual crypto revenue in Russia will reach $2.8 billion.

Crypto Revenue Forecast in Russia, 2017-2028. Source: Statista
Crypto Revenue Forecast in Russia, 2017-2028. Source: Statista

In July 2023, BeInCrypto reported that President Putin had signed the digital ruble law. Just a year earlier, in July 2022, Putin signed a bill prohibiting crypto as a payment option within the country.

Read more: Top 5 Crypto Companies That Might Go Public (IPO) in 2024

However, not all Russians were enthusiastic about the digital ruble. In August 2023, a survey by Bankinform revealed that a significant portion of respondents see the digital ruble as potentially fraudulent.

The survey revealed that 13% of participants are eager to use the digital ruble. However, 34% of respondents expressed interest in the new ruble with no intention of using it.

Crypto Exchange Binance Exits Russia

In September 2023, crypto exchange Binance announced it was exiting the Russian market due to concerns over compliance.

Binance has sold its business to CommEX. Noah Perlman, Binance’s Chief Compliance Officer, said:

“As we look toward the future, we recognize that operating in Russia is not compatible with Binance’s compliance strategy. We remain confident in the long-term growth of the Web3 industry around the world and will focus our energy on the 100+ other countries in which we operate.”

Meanwhile, several Russian parliamentary figures have shown their support for Central Bank Digital Currencies (CBDC) in recent times.

Read more: Top 12 Crypto Companies to Watch in 2024

In September 2023, Anatoly Aksakov, head of Russia’s parliamentary financial committee, argued that the role of traditional banks would diminish as blockchain technology becomes more integrated into global financial systems.

According to him, the digital ruble, aided by blockchain technology and advanced algorithms, could perform most current functions by banks. 

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Ciaran Lyons
Ciaran is a cryptocurrency journalist based in Sydney, Australia. He particularly enjoys writing about CBDC developments and the practical implementations of cryptocurrency in real-world scenarios. He has also appeared across major television networks in Australia including Channel Ten, Channel Nine and SBS TV. Prior to his foray into cryptocurrency, Ciaran worked as a presenter on national radio station Triple J.