• A 47-year-old resident of Orenburg in Russia has been sentenced to four years in prison for crypto mining-related fraud.
• The man had duped a local entrepreneur into investing money in a crypto mining project, but had failed to deliver on any of his promises.
• He was ordered to pay full compensation as well as a fine of nearly $4,300.
Russian Crypto Mining Fraudster Jailed
A 47-year-old resident of Orenburg in Russia has been sent to prison for four years for committing cryptocurrency mining fraud. The man had duped a local entrepreneur into investing money in a crypto mining project, but had failed to deliver on any of his promises, and was subsequently ordered to pay full compensation as well as a fine of nearly $4,300.
Details of the Fraud Scheme
The court heard that the fraudster offered the local entrepreneur an opportunity to work with him on a project where they would buy and resell cryptocurrency hardware for profit. The entrepreneur provided approximately $108,000 from his own funds and another company he founded invested nearly $172,000 into the scheme. Unfortunately, no crypto mining equipment was ever delivered nor were any refunds issued.
Guilty Plea Denied by Defendant
The defendant pleaded not guilty in court claiming that he „had no intention“ of deceiving the entrepreneur; however the court found him guilty on two counts of fraud resulting in his sentence and financial restitution order being issued.
Growth of Crypto Mining Industry
Crypto mining is becoming increasingly popular throughout Russia with certain parts such as Irkutsk becoming known as hotspots for miners. Russian energy firms are also looking at potential gas powered crypto mining projects at various oil drilling sites due to their low cost prices compared to other countries like Kazakhstan which has 18% hash rate compared with 11.23% from Russia and 35% from USA according the Lil Morrison (@LillyMoCrypto).