Fraud

Tax Agency Starts Checking Crypto Traders in Romania

03/07/2022 by Idelto Editor

Authorities in Romania are going after investors who failed to report revenues from crypto trading and pay tax. The offensive is part of efforts to respond to financial trends, the country’s tax body said in a statement, unveiling it was able to identify almost €50 million of undeclared crypto gains.

Tax Authority in Romania Verifies Gains From Cryptocurrency Trading

Romania’s National Agency for Fiscal Administration (ANAF) announced this week that officials from its department responsible for prevention of tax evasion and fraud have initiated inspections to establish the revenues received from digital coin trading on various platforms like Binance, Kucoin, Maiar, Bitmart, and FTX.

The checks have been presented as a move within the tax authority’s new strategy to “adapt to the evolution of technology and financial market trends.” They targeted 63 Romanian citizens who, as ANAF established, made €131 million euros in crypto revenues between 2016 and 2021.

According to a report by the Romanian business news portal Economica.net, the tax inspectors have found that digital assets worth a total of €48.67 million were missing from their tax returns. Тhe agency has so far ordered the recovery of some €2.10 million in unfulfilled tax obligations.

At the same time, the ANAF has confirmed that gains from cryptocurrency trading in the amount of approximately €15 million had been properly declared and the due income tax and social contributions paid in full.

The Romanian tax authority intends to also check revenues from various other crypto-related operations, such as mining or trading of non-fungible tokens (NFTs). It said the goal is to increase budget receipts and voluntary compliance among all categories of taxpayers.

The ANAF’s anti-fraud department has recommended all Romanians who carry out such activities or plan to get involved to make sure they report their revenues and cover their fiscal obligations to the state.

At present, the European crypto space is largely regulated by national laws and authorities but the legal environment for investors and businesses is going to change significantly with the upcoming EU-wide rules for the industry that will apply to various cryptocurrency transactions.

This week, representatives of the European Parliament, Commission and Council reached an agreement to adopt a set of anti-money laundering rules and a legislative package known as the Markets in Crypto Assets (MiCA) law, which will be implemented across the 27 member-states.

Do you expect Romania to conduct regular checks of cryptocurrency investors in the future? Tells us in the comments section below.

Hardware Worth $1.9 Million Stolen in Russia’s Crypto Mining Capital

25/06/2022 by Idelto Editor

Russian law enforcement is looking into the alleged theft of mining hardware valued at around $1.9 million. The powerful computing equipment disappeared from a crypto mining hotel in Irkutsk, the owners of which have been accused of large scale fraud.

100 Russians Lose Mining Machines Worth 100 Million Rubles

Police in the Russian Irkutsk Oblast have launched an investigation of the operators of a mining hosting facility suspected of defrauding clients and stealing their expensive coin minting hardware, Tass news agency reported, quoting the region’s Main Directorate of the Interior Ministry.

In anticipation of quick earnings, the miners handed over their devices to those who were running the mining hotel, law enforcement officials explained. At some point, the latter stopped all payments to their customers and failed to return the expensive machines.

“A criminal case was initiated based on these facts under part 4 of article 159 of the Criminal Code of the Russian Federation (large scale fraud). Various material evidence, including computer equipment and documentation, was seized from their office,” a statement detailed.

The investigators have been able to establish that between November 2021 and May 2022, the suspects lured people who wanted to install their coin minting hardware in a mining hotel. They were offered renting and electricity prices that were far below the actual market rates.

At the same time, they urged the miners to hand over their equipment as quickly as possible, citing limited renting space. The owners of the mining rigs were not told where their devices were going to be located and only representatives of the hosting service had access to the mined coins.

Russian police are now looking for the fraudsters. Around 100 people have suffered losses from their actions. They gave the organizers of the mining hotel equipment valued at an estimated total of 100 million rubles, close to $1.9 million.

Offering some of the lowest electricity rates in the country, starting at just $0.01 per kWh in rural areas, the region of Irkutsk has seen a spike in crypto mining, with farms often installed in basements and garages and powered with subsidized household electricity.

Largely for this reason, the oblast has been dubbed the mining capital of Russia. Earlier this year, local electricity suppliers complained about a surge in power consumption in residential areas, which was blamed on home mining.

Russian media reports have revealed that planes with second-hand mining equipment from China, which cracked down on the industry in May 2021, have continued to arrive in the region this year, while cases of mining hardware theft have been on the rise. Russia is planning to legalize crypto mining which can benefit from its abundant energy resources and cool climate.

Do you expect more cases of fraud related to crypto mining in Russia in the future? Share your thoughts on the subject in the comments section below.

Former CEO of Crypto Exchange Wex Dmitry Vasiliev Reportedly Detained in Croatia

01/06/2022 by Idelto Editor

Dmitry Vasiliev, co-owner and former chief executive of the now defunct Russian crypto exchange Wex, has been arrested upon entering Croatia, local media reported. The crypto entrepreneur is wanted by Kazakhstan where he is accused of stealing money from an investor.

Wex Executive Vasiliev Apprehended at the Airport in Zagreb

Belarus-born Dmitry Vasiliev, former CEO of Wex, once the largest crypto trading platform in the former-Soviet space, has been detained at Franjo Tudjman Airport in the Croatian capital on Wednesday, May 25, the Jutarnji List reported.

According to the daily, the authorities in Zagreb have acted on a red warrant issued by Interpol on a request from Kazakhstan. Vasiliev, who resides in the Russian Federation, is wanted in the Central Asian country for defrauding an investor of $20,000.

Kazakhstan’s law enforcement has been seeking Vasiliev’s extradition for some time, but the crime he is accused of there is relatively minor compared to other suspected offenses. Wex went bankrupt in 2018 and according to estimates by a group of users, the total losses exceed $400 million.

The news of Vasiliev’s detention in Croatia comes after in September last year, the Polish press revealed he had been arrested at the Warsaw airport in mid-August and was awaiting extradition to Kazakhstan. In December, it was reported he had returned to Russia following his release.

The crypto businessman was also temporarily apprehended in Italy some two years ago, but Italian authorities let him go after several weeks, citing faults in the extradition request. He was able to return to St. Petersburg, Russia’s second-largest city, where he lives.

In March 2022, the Russian Ministry of Internal Affairs announced the arrest of a man accused of stealing financial assets from a cryptocurrency exchange. While neither the person nor the platform were identified, a report suggested this was Aleksey Bilyuchenko, another Wex co-founder.

In 2017, Wex was established as successor of the infamous BTC-e exchange which had closed down earlier that year after the arrest in Greece of one of its alleged operators, Alexander Vinnik. The U.S. accuses him of laundering up to $9 billion through the trading platform. Vinnik was extradited to France, where he was sentenced to five years in prison in December 2020, and is also wanted by Russia.

Do you think Dmitry Vasiliev will be released again by the authorities in Croatia? Tell us in the comments section below.

Majority of Russia’s Financial Pyramids in Q1 Linked to Crypto, Scammers Exploit Sanctions Topic

08/05/2022 by Idelto Editor

Many of the financial pyramids identified in Russia during the first quarter of the year have been associated with cryptocurrencies, a top central bank official has revealed. Fraudsters are actively exploiting the hot topics of the day, including the sanctions theme.

Pyramids Offer Russian Investors Ways to Circumvent Western Sanctions

Amid growing financial uncertainty, Ponzi schemes advertising opportunities to invest in digital assets are mushrooming in Russia. Of all financial pyramids detected by regulators in the first three months of 2022, well over half have used cryptocurrency as a lure.

“Schemes based on transfers using cryptocurrencies or investments in ‘digital instruments’ have received another impetus,” Valery Lyakh, director of Bank of Russia’s Department for Combating Unfair Practices told Tass news agency. More than 58% of the pyramids identified by Russian financial authorities in the first quarter of this year were linked to cryptocurrencies, Lyakh detailed.

As usual, the scammers take advantage of the trending topics in the news, the high-ranking representative of Russia’s monetary authority added. “Against the backdrop of financial uncertainties, calls to ‘save money’ in foreign jurisdictions, invest in a foreign project, in foreign securities are popular,” Lyakh elaborated.

Investment proposals like these have been made in the past but now fraudsters also exploit the sanctions imposed on Russia over its invasion of Ukraine, Valery Lyakh pointed out. They are talking about projects in countries that are not supporting the measures against Moscow and offers to circumvent restrictions on international payments have become the new trick to convince victims to send their money, he added.

The possibility of Russia employing cryptocurrencies to evade sanctions has raised concerns in the West but a recent report by Moody’s suggests that Moscow’s ability to avoid the penalties using digital assets is limited by the relatively small size of the crypto market and its low liquidity. The rating agency acknowledged, however, that small crypto transactions made by Russians have increased.

Crypto investment was the main theme of the notorious Finiko Ponzi scheme, Russia’s largest in recent years, which collapsed last summer after receiving over $1.5 billion worth of bitcoin between December 2019 and August 2021, according to Chainalysis. Russian law enforcement recently arrested six more members of Finiko involved in defrauding thousands of victims in Russia, other former-Soviet countries and around the world.

Do you expect scams offering Russians to evade sanctions with cryptocurrencies to increase further? Tell us in the comments section below.

Brazilian Senate Approves Cryptocurrency Law Project

30/04/2022 by Idelto Editor

The Brazilian Senate has approved a recently presented cryptocurrency policy, advancing the project to discussions in the deputy chamber. The proposal will have to be greenlighted by the deputies of Congress and signed by President Jair Bolsonaro to be approved as law. The project presented is the result of the fusion of several law projects dealing with crypto.

Brazilian Senate Greenlights Crypto Law Project

The Brazilian Senate has greenlighted a cryptocurrency law project that seeks to give more clarity and protect users from different cryptocurrency-related scams that have happened in the country. The project will now advance to the Chamber of Deputies, which will be responsible for debating and approving or rejecting this new project.

The project was elaborated by choosing different projects that were presented earlier by taking some parts from one, and some from another. Senator Flávio Arns, senator Styvenson Valentim, senator Soraya Thronicke, and federal deputy Aureo Ribeiro all contributed to the final text. This was announced by local media before, which informed the institution was taking steps to achieve the approval of a cryptocurrency law before the end of Q2.

While discussing the law project, rapporteur Iraja Abreu stated:

We advanced the discussions of the report so that we could here today finally vote on this matter of regulation of crypto assets… The central bank was constantly demanding Congress to position ourselves in relation to a regulatory framework that could understand the dimension of this new business environment.

Law Project Dispositions

The cryptocurrency law project approved by the Brazilian senate establishes the concept of cryptocurrencies and virtual asset service providers (VASPs), but leaves the faculty of naming the institution destined to oversee them to the Executive branch of the government. In earlier iterations of this project, this faculty was assigned to the Central Bank of Brasil. The executive branch of the government will be able to assign these tasks to an existing organization or create one just for this.

The subject of non-fungible tokens (NFTs) was left outside the scope of the regulation, with the regulation of these tools being left to another law project due to their special traits. However, the document does amend the penal code of the country to include a new crime, denominated “fraud in the provision of services of virtual assets, securities, or financial assets,” with penalties going from imprisonment from two to six years plus fines.

The document also proposes tax benefits for cryptocurrency mining operations that use 100% renewable energies and become carbon neutral.

What do you think about the approval of the cryptocurrency law by the Brazilian senate? Tell us in the comments section below.