$40 million crypto pyramid scheme busted in Ukraine
Ukrainian law enforcement has uncovered a Russian-based crypto pyramid scheme suspected of raking in millions in US dollars.
The security service in Ukraine has discovered a large-scale pyramid scheme disguised as an investment project called “Life is good”. The perpetrators are said to have offered the victims the opportunity to become investors, and quickly increase their capital investments.
A pyramid scheme relies on luring new investors to pay back previous investors. Fraudsters often promise high returns with little risk. They are fundamentally unsustainable and often leave victims with significant losses.
According to the authorities, the perpetrators obtained almost 40 million dollars and defrauded over a thousand people. The money was then transferred to the organizer’s crypto wallets and bank accounts. To use the service, the fraudsters developed their own online resource with the accounts of potential “investors”.
The fraudulent deals promised “investors” stable profits in the form of dividends from investing in shares of promising world-class companies. In addition, the fraudsters “guaranteed” their customers “bonuses” to attract new customers.
A Russia-based scheme
Prior to 2017, the scheme operated from the Russian Federation. But they eventually opened an office in the Ukrainian capital of Kiev and paid for a major advertising campaign. Kyiv police have arrested over 10 people. Most of them are citizens of the Russian Federation.
The pyramid scheme tried to hide its involvement after the invasion of Ukraine by Russian forces in February 2022. Probably due to increased scrutiny of Russian businesses in the country.
The authorities found computers, mobile phones, financial documents and drafts at the office in Kiev and several residential addresses. All had evidence of illegal activity. The security service also found souvenir and advertising products used to attract “investors”.
According to Ukrainian media, the investigation is ongoing.
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