Ukrainian law enforcement has exposed a crypto pyramid scheme based out of Russia that is suspected of raking in millions in US dollars.
The Security Service of Ukraine has discovered a large-scale pyramid scheme disguised as an investment project named “Life is Good.” The perpetrators reportedly offered victims the opportunity to become investors, rapidly growing their capital investments.
A pyramid scheme relies on the luring of new investors to pay off earlier investors. Fraudsters often promise high returns with little risk. They are fundamentally unsustainable and often leave victims with substantial losses.
According to the authorities, the perpetrators defrauded over a thousand victims, netting nearly $40 million. The money was then transferred to the organizer’s crypto wallets and bank accounts. To use the service, the fraudsters developed their own web resource with the accounts of potential “investors.”
The fraudulent deals promised investors profits in the form of dividends from investing in the shares of promising world-class businesses. Additionally, the fraudsters “guaranteed” their clients “bonuses” in order to attract new clients.
A Russia-Based Scheme
Before 2017, the scheme operated out of the Russian Federation. But they eventually opened an office in the Ukrainian capital of Kyiv and paid for a large advertising campaign. The Kyiv police have reportedly made ten arrests in connection with the fraud. Most of those charged are citizens of the Russian Federation.
The pyramid scheme tried to conceal its involvement after the invasion of Ukraine by Russian forces in February 2022. Likely due to increased scrutiny of Russian businesses in the country.
Reports have emerged that the authorities found computers, mobile phones, financial documents, and draft records at the Kyiv office and several residential addresses. All of them had evidence of illegal activity. The security service also found souvenir and advertising products that were used to attract “investors.”
According to Ukrainian media, the investigation is ongoing.
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Source: https://beincrypto.com/ukraine-authorities-uncover-40-million-crypto-pyramid-scheme/