The Central Bank of Russia has revealed a new type of financial pyramids using cryptocurrencies

The Central Bank of Russia has identified a new type of financial pyramids operating on the principle of online investment games, in which cryptocurrencies and electronic wallets are most often used to pay for participation.

Today, the share of such projects is 8% of the total number of identified financial pyramids. Some of them are just gaining popularity. Valery Lyakh, Head of the Department for Countering Unfair Practices of the Bank of Russia, said:

“Usually users register in such a game project, then buy characters or, for example, virtual real estate. All this should generate income. Just in order to receive a reward, you need to bring new players into the project – as a rule, acquaintances or relatives. ”

The operation of such games is based on the principle of network marketing, it is also used in pyramid schemes. According to Lyakh, if there are no new players, the project stops, and the participant cannot withdraw his money, because someone has already done it.

Money to pay for participation is credited through your personal account using various payment services, electronic wallets and cryptocurrencies. In addition, the user agreements on such sites usually indicate that there are no money-back guarantees – this is written in small letters at the bottom of the document.

Against the background of the growing interest in digital assets, primarily NFT, a large number of platforms appear, which the Central Bank regards as financial pyramids. According to Pavel Ikkert, Managing Partner of Ikkert & Partners Law Firm, many of them are.

According to him, scammers are building game pyramids based on one of the first games with NFT – CryptoKitties. This is an online Ethereum blockchain game developed by Dapper Labs where players buy, sell and breed virtual cats. Each of them has a unique digital certificate, and the approximate cost of such a cat ranges from $ 250 to millions of dollars.