A Russian court sentenced a former Finiko executive to 3 years in prison for a massive $1.1 billion crypto fraud scheme. First conviction in a major case.
A Russian court has sentenced a Finiko executive to three years in prison for her role in the conspiracy that resulted in the most significant cryptocurrency fraud in “post-Soviet history.”
According to Izvestia, Liliya Nurieva, the former director of networks at Finiko, was sentenced to four and a half years in court in Vakhitovsky, Kazan, on May 17.
Nevertheless, the court declared that the duration of her pre-trial detention would be regarded as “time served.”
The magistrate denied the prosecutors’ motion to sentence Nurieva to six and a half years in prison.
Initial Finiko Crypto Scam Executive Arrested
According to the media outlet, Nurieva was confronted with a ten-year prison sentence before her trial.
However, according to the report, the former executive reportedly reached a “pre-trial agreement” with prosecutors.
A spokesperson for the executive’s attorney informed the media that Nurieva planned to file an appeal of the sentence. She was convicted of fraud and offenses associated with organized crime.
Finiko debuted in 2018 as a cryptocurrency “investment fund.”
The country’s Central Bank believes that the company defrauded citizens of approximately $1.1 billion. A substantial portion of this money has yet to be recovered.
After the scheme started to unravel in 2021, a significant number of the Finiko masterminds fled abroad.
In late 2022, Interpol apprehended co-founder Edvard Sabirov in the UAE following an extensive global search.
Midway through 2021, the “public face” of the enterprise, co-founder Kirill Doronin, was arrested.
Nurieva, however, continues to be the first Finiko executive to receive a guilty verdict and a sentence.
Finiko informed investors that for bets of $1,000 or more, it operated an “automated profit-generating system” that ensured clients “up to 30%” in profits.
Additionally, the company provided various financing and leasing options, all at extravagantly low interest rates.
Finiko acquired funds (BTC) from its clientele via the Bitcoin platform and generated its cryptoasset.
Firm Used Ponzi Methods
Prosecutors believe the entity paid older investors with funds and cryptocurrencies belonging to newer clients.
However, its platforms became unstable midway through 2021. Throughout a significant portion of the first half of the year, clients lodged grievances regarding delayed payments.
In June, complete disbursements were ceased, and the worth of its coin plummeted. Additionally, Finiko offices nationwide ceased operations “virtually overnight.”
Since then, Finiko executives have blamed each other for the failure. However, in its heyday, Finiko was an absolute social media phenomenon.
Investors Attend Court Hearing
Initial reports suggested that approximately 10,000 individuals may have made financial investments through Finiko platforms.
The firm acquired an air of credibility by the articulate Doronin.
In the interim, Sabirov was a business associate of the former Russian Minister of Communications, Nikolai Nikiforov.
The attorney for Nuriyeva testified in court that her client enrolled in the company without any awareness that Finiko was fraudulent.
Additionally, Nuriyeva had personally invested in the company, the attorney said, and became aware of its fraudulent nature “during her subsequent correspondence with senior executives.”
Several Finiko investors were in attendance at the trial. Izvestia quoted one of them, Lyudmila Yamshchikova of 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.”
