Lilian Nurieva, former cyber chief of Russian crypto investment fund Finiko, has been sentenced to three years in prison for defrauding private investors and participating in an organized crime group.

The federal Investor and Shareholder Rights Defense Fund considers the $55 million pyramid scheme the second-largest financial scam in Russia's post-Soviet history.

Crypto investment fund turns into a Ponzi scheme

Since 2021, Russian official agencies have begun investigating Finiko, which was labeled as a "crypto investment fund", for suspected fraud and involvement in organized criminal activities. The results of the investigation showed that Finiko actually operated a Ponzi scheme and illegally obtained huge amounts of investors' funds.

Finiko presented itself to investors as a cryptocurrency fund in a pyramid sales model from 2018 to 2021. Kirill Doronin, the main architect and beneficiary of this fraudulent scheme, successfully attracted thousands of customers to participate by holding masterclasses across Russia.

Together with his associates, Doronin created a criminal community that systematically embezzled citizens’ funds. These criminals would approach potential clients, claiming that they had developed a “unique automated profit-generating system” that “guaranteed” huge returns in cryptocurrencies, including Bitcoin.

Users initially received their dividends and were able to withdraw their funds in Bitcoin (BTC). However, things took a turn for the worse for investors in 2021 after Finiko’s crypto tokens began to lose value. Within a month, the company’s offices were abruptly closed and its website was taken down, leaving investors with nothing.

Doronin assured investors that the crypto fund was experiencing technical glitches, but it was later determined that his accomplices had fled the country with investors’ funds.

The investigation revealed that many clients even took out loans or sold their homes to invest in the fraudulent fund, which was later found to be operating in line with the hallmarks of a Ponzi scheme, using funds from new investors to pay earlier investors.

At the time, Russia’s Interior Ministry (MDV) estimated that the company had defrauded more than 10,000 people and stolen more than 5 billion rubles, or about $55 million.

First Finiko executive sentenced

Lilia Nurieva, a senior executive at Finiko, has been found guilty of defrauding investors by the Vakhitovsky District Court of Kazan. Nurieva, a key player in the crypto scheme, was sentenced to a “lenient” prison term for her cooperation with prosecutors.

The former executive was originally sentenced to four and a half years in prison for fraud and participating in an organized criminal association. However, Nurieva will only serve three years because her time in pretrial detention will also be counted towards her sentence.

According to local reports, prosecutors had originally requested a six-and-a-half-year prison sentence for the Russian executive, but Nurieva, a former cyber unit chief, was able to reduce her sentence as a result of a pretrial agreement. The deal allowed Nurieva to avoid facing up to ten years in prison.

Moreover, the executive fully admitted the charges and cooperated with the investigation, allowing her to be tried separately from the other defendants. Her lawyer, Maria Belousova, said prosecutors were "fair" in their case against her client. She also noted that Nurieva was the only one among all the defendants who invested her own money in the scheme.

According to Belousova, the former Finiko executive invested 40 million rubles in the investment fund before joining the organization.

When she joined the criminal organization, she had the illusion that it was not criminal and illegal. Then, in the process of communicating with senior management, she gradually saw the truth.

In addition to Doronin, ten other defendants are currently awaiting trial. The Prosecutor General’s Office approved their indictments on April 27 and transferred the cases to the Vakhitovsky Court. The defendants also face charges of large-scale fraud committed by organized criminal groups and organized groups.

Conclusion:

Lilia Nurieva was sentenced for a Ponzi scheme involving the Russian Finiko Fund, a verdict that not only brings justice to the victims but also serves as a wake-up call to cryptocurrency investors. As the remaining defendants in the case continue to await trial, the case highlights the ethical and legal challenges that participants may encounter. The development of the Finiko incident is expected to continue to attract the attention of the crypto community and the financial community, and it is likely to become a key factor in promoting regulatory reforms and improvements in practices in the crypto investment field, helping to build a more stable and reliable investment platform.

I hope this case can serve as a wake-up call to other potential investors, alerting them to similar financial scams and Ponzi schemes. Before investing, be sure to do enough research and understanding to avoid becoming a victim of fraudulent activities. At the same time, I hope the judicial system can severely punish criminals and maintain the integrity and stability of the financial market. Let us work together to build a more transparent and secure investment environment. #加密货币诈骗 #俄罗斯 $BTC