Russian police arrest Kazakhstani crypto pyramid scheme leader

Kazakhstan pyramid scheme

On May 28th the spree of crypto pyramid scheme arrests got yet another addition, from the eastern hemisphere this time. The Russian Police have arrested a Kazakhstani citizen, who is alleged to have created and operated a cryptocurrency pyramid scheme for quite some time now.

The individual was also facing an international arrest warrant, as his victims came from different corners of the world. The information came directly from the Ministry of Internal Affairs of Russia.

What happened?

The arrested individual, whose identity has not been revealed yet, has been charged with defrauding multiple investors of their invested funds while promising high returns on cryptocurrency trades. He was also accompanied by a group of wanted criminals.

The Pyramid scheme is reported to have reached in the millions as the news was ousted when one of the victims blew the whistle and approached the Ministry of Internal Affairs. There was a recorded case of at least 300 victims, with the largest loss being around $36,000.

The Interpol had been searching for the individual for quite some time now, but he managed to flee Kazakhstan sometime in January 2019 and crossed the Russian border illegally on horseback. Once arrested, the suspect confessed to all of his crimes.

The Ministry of Internal Affairs and the Police force of the Russian Federation are negotiating criminal extradition with Kazakhstan, as the individual has to be judged in a Kazakhstani courtroom.

There is no information as to what type of sentence is relevant for an offence like this, but it definitely is in the double digits.

Unfortunately, this is not the first case of a Pyramid scheme being uncovered in 2019. In May alone, there were three separate occasions across the world.

The first was discovered in Brazil where criminals defrauded investors from at least $210 million, while the second was in the United States where a California court accuses a citizen of leading a multi-million dollar pyramid scheme.

It seems like financial education for cryptocurrencies is not there yet, and many still fall for pyramid schemes and MLM. A prevention taskforce is needed in every country, but it seems the local authorities don’t see it that way.