Russian Influencer Sentenced for Crypto Scam Tied to Ukraine War Funding

Valeria Fedyakina, a 24-year-old Russian influencer known online as “Bitmama,” has been sentenced to 7 years in a prison colony after running a major crypto scam that stole over $21 million from investors. Russian prosecutors say some of the stolen funds were used to support Ukraine’s military, a claim that adds a geopolitical twist to this case.

What’s going on?

Fedyakina made a name for herself by posing as a global crypto expert. Through flashy Instagram posts and promises of huge returns, she convinced people to invest large sums of money in what she claimed were Bitcoin opportunities. In reality, she was running a Ponzi scheme, using money from new investors to fake success and keep the scam going.

Between July and September 2023, she is believed to have stolen more than 2.2 billion rubles, about $21 million USD, from Russians. She was caught trying to flee the country last fall and has been in jail ever since . During her time behind bars, Fedyakina gave birth to a child.

Prosecutors claim that some of the stolen money was funneled to Ukraine’s military, potentially turning Fedyakina from a con artist into a serious player in the Russia-Ukraine conflict. The Russian court emphasized that this made the crime even more serious and contributed to the long sentence.

The takeaway from this crypto case

This case shows a growing issue in the crypto world: scams are becoming more common, and many people still don’t understand how to spot them. Without strong rules and protections, the crypto space is an easy target for fraudsters.

It also shows how money can move across borders and into conflicts in unpredictable ways. What starts as a fake investment scheme can end up funding a conflict.

For investors, the warning is clear: be skeptical of big promises, especially when they come from social media. And for regulators, Europe taking the lead over the United States in crypto regulation serves as a reminder that crypto markets need more oversight.