Key Takeaways:
- Russia’s FSB closed down 9 crypto exchange points not registered in the country in the capital of Moscow.
- In the action, over twenty exchange workers were taken into custody.
- The platforms were allegedly used to transfer money that had been stolen via phone fraud overseas.
Russian authorities are targeting a network of unregistered exchange points for crypto that allegedly launder money stolen by Russians on the Internet. Nine exchange channels in Moscow were targeted; they were linked to call centers in Ukraine, authorities state.
9 Crypto Exchange Points Targeted in Moscow
Russia’s Federal Security Service (FSB), working with the Interior Ministry, said on August 7 that it had disrupted nine channels allegedly used to transfer illicit funds overseas through cryptocurrency.
More than 20 employees of unregistered crypto exchange operations were detained at Moscow City, one of the capital’s main business districts.
The exchanges were a part of a scheme whereby the victim was operated by a scheme operator to make the transfers of funds, according to the FSB. The victims reportedly communicated with these scam call centers and were led by the nose in a step-by-step process without realizing they were being ripped-off.
Some victims were pensioners and other people who were enticed to buy cryptocurrencies using the exchange points, authorities said. Presumably, the crypto was then moved to accounts that belong to people the FSB called Ukrainian handlers.
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Young Couriers Allegedly Moved Cash to Crypto Exchanges
The investigation also identified couriers allegedly working with the scam networks. The FSB said some were between 18 and 25 years old and collected money from victims before delivering it to crypto exchange locations.
The agency also stated that the young people of various parts of Russia were recruited remotely to operate at exchange points and some of them had limited financial expertise and were appealed for easy money.
Police are still searching for other victims to determine the scope of the alleged operation and if any money is owed by the scoffed can be recovered.
Crypto Used to Move Fraud Proceeds Abroad
This incident exemplifies the potential of cryptocurrencies as a component of sophisticated scams when criminals use informal or unregistered currency exchange services to convert real currency into digital currency.
Article 159, part 4 of the Russian Criminal Code defines a crime as fraud over a particularly large sum, and the Government of Russia’s Interior Ministry has opened two such cases against Russia. Staff of the crypto exchange businesses and the suspected couriers are being treated as accomplices, the FSB said.
The cited provision offers up to a ten-year prison sentence to those who are charged. Investigators continue to work to uncover other players, confirm witness testimony about the amount allegedly being sent through the crypto network and clarify witness statements.
It also highlights the dangers posed by unregistered crypto exchanges, especially those that are not under any formal compliance and know-how regulation processes.
In this instance, Russian officials say this exchange’s internal systems were used to facilitate the flow of money raised via phone scams and cryptocurrency transactions to people outside of Russia.
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