Finiko Executive Jailed: Unraveling Post-Soviet Era’s Largest Crypto Scam

A Russian court has sentenced a former employee at the cryptocurrency pyramid scheme Finiko to three years in prison, for her role in masterminding the largest crypto scam in "post-Soviet history." According to a report by Izvestia, Liliya Nurieva, the former head of networks at Finiko, was handed a four-and-a-half-year jail term at a court in Vakhitovsky, Kazan on May 17.

Police across the world believe the firm ran a likely Ponzi scheme that defrauded citizens out of around $1.1 billion. Policymakers say much of this money will never be recovered.

The circus came to town in 2018, with claims that it ran some sort of crypto "investment fund." Indeed, the country's Central Bank now believes that the company was a crypto fake, and duped its citizens out of an estimated $1.1 billion.

Police say most of this money has not been and will probably never be recovered. The whole project unraveled in 2021, following which the majority of the Finiko masterminds fled overseas. After a long manhunt across the borders, Interpol got the co-founder Edvard Sabirov in the UAE in late 2022.

The co-founder Kirill Doronin, the "public face" of the operation, was arrested in mid-2021. However, Nurieva represents the first Finiko executive to have been found guilty and sentenced.

The outlet added that, prior to the trial, Nurieva had been facing a 10-year sentence over the case. It explained to readers, however, that the former executive had entered into a "pre-trial agreement" with prosecutors. But the executive's lawyer told representatives of the mass media that Nurieva is going to appeal the sentence. She was found guilty of fraud and organized crime-related offences.

Finiko had once happily explained to investors that it operated an "automated profit-generating system," which it said guaranteed customers profits of "up to 30%" on stakes of $1,000 or above. The company also operated various lending and financing services—all boasting highly generous rates. Finiko collected money from customers in Bitcoins. It also created its own cryptocurrency.

Company Used Ponzi Schemes, Court Tells

Prosecutors believe the company used the money and the azero clients invested to pay off the older ones. However, the system became unstable from around mid-2021. Customers stated that additionally payments for more than a year have begun to run late for most of the first half of the year.

They were stopped in June. The value of the coin created by the company collapsed. And practically all Finiko offices around the country closed "almost overnight" The Finiko bosses have since started to blame each other for the collapse. However, at its peak, Finiko was a massive hit on social media.

Investors Came to Trial

First reports spoke of the participation of almost 10,000 clients, who could have placed their funds on the platforms of Finiko. The acting of the convincing Doronin gave the company credibility. Sabirov is the former business partner of ex-Communications Minister of Russia Nikolai Nikiforov.

Nuriyeva's lawyer told the court that his client had no idea that Finiko was an illegal scheme when she started working for the company. He added that Nuriyeva invested her own money in the company, and came to the realization that the company was fraudulent "in the course of her later communication with top managers."

The trial was attended by several investors in Finiko. Izvestia quotes one of them, Lyudmila Yamshchikova from Kazan, as saying:

“At one point the [Finiko] payments stopped. They just stopped, all of a sudden. I invested almost [$11,000]. I was counting on the payments, as I was using them to pay off my mortgage. Half of our city bought apartments, cars, and took out loans because of Finiko. But then the withdrawals just dried up.”