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Russian Court Sentences Finiko Executive to Prison
A Russian court has sentenced a Finiko executive to three years in prison for her involvement in what has been described as the biggest crypto scam in “post-Soviet history.” Liliya Nurieva, the former head of networks at Finiko, received a four and a half year term at a court in Vakhitovsky, Kazan on May 17. The court took into account the time she had already spent in pre-trial custody as “time served.”
Background of the Finiko Crypto Scam
Finiko, launched in 2018 as a crypto “investment fund,” is believed to have defrauded citizens of approximately $1.1 billion according to the country’s Central Bank. The project began to unravel in 2021, leading to the arrest of key figures involved in the scam.
Legal Proceedings and Sentencing
Despite facing a potential 10-year jail term, Nurieva reached a pre-trial agreement with prosecutors. She was found guilty of fraud and organized crime-related offenses. While Nurieva plans to appeal the sentence, she is the first Finiko executive to be convicted and sentenced.
Operational Details of Finiko
Finiko attracted investors by offering an “automated profit-generating system” with promises of up to 30% returns on investments of $1,000 or more. The firm also provided borrowing and financing services at attractive rates, collecting funds in Bitcoin and issuing its own cryptoasset.
Ponzi Scheme Allegations
Prosecutors allege that Finiko used new investors’ funds to pay off older investors, leading to financial instability in mid-2021. The company’s platforms experienced disruptions, resulting in delayed payments and eventual halting of withdrawals, causing significant financial losses to investors.
Impact on Investors
Reports indicate that nearly 10,000 individuals may have invested in Finiko, with many facing financial hardships due to the collapse of the scheme. Investors, like Lyudmila Yamshchikova from Kazan, expressed their distress over the sudden cessation of payments, affecting their financial obligations and plans.
Conclusion
Despite the legal actions taken against key figures involved in the Finiko crypto scam, the aftermath continues to impact investors who placed their trust and funds in the fraudulent scheme. The case serves as a cautionary tale about the risks associated with unregulated investment schemes in the crypto industry.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
