In the first half of 2023, the Central Bank reported a drop in detected pyramid schemes in the Moscow region—from 15 cases in the same period a year earlier to six. According to analyst Anton Saikin, the decline stems from scammers shifting away from opening offices and registering in the capital, instead running their operations online. He noted that creating a website is often enough to attract investors using three main schemes.
what is a financial pyramid
A financial pyramid is a fraudulent setup where obligations to depositors are funded by money from new participants. As the pool of newcomers shrinks, there are fewer funds to pay existing depositors, and investors lose their money.
what is a financial pyramid
A financial pyramid is a fraudulent scheme that pays existing investors with the money of new participants. Over time, as entry is limited, funds dry up and people suffer losses.
The pyramids appeared in Russia in the late 1980s, with Pax as one of the earliest examples in Volgograd in 1991. The most infamous Russian pyramid was MMM, created by Sergei Mavrodi. It drew millions of participants, with damages estimated at 110 million rubles. Mavrodi received a prison sentence of four and a half years for fraud.
Scheme 1. Online task
Scam artists can lure users with an online economic game. Saikin explained that investors are invited to buy a character or virtual item in a digital game and promised returns of 100–200 percent, or even 500 percent, in a few hours. He cited examples such as BUBLIK, DRAGON MONEY, and BIG BAMBOO.
The investor gains pretend virtual income that is claimed to be cashable. But when attempting to withdraw, the Central Bank representative noted that the user is first asked to pay income tax, then a manager’s commission, and finally a percentage of the winnings themselves.
Eventually, the user’s account is reset and funds are not returned. These projects are often promoted via social networks and instant messaging apps. If there is no competition element in the game, Saikin cautioned, the opportunity to profit from buying virtual characters, goods, or in‑game real estate should raise red flags.
According to him, scammers may offer internal tokens or game characters for cryptocurrency. Bringing in a friend for a bonus is another clear sign of a fraudulent project, the expert explained.
Diagram 2. Matrix financial pyramid
Saikin described a pyramid where scammers openly call it a pyramid. Participants aim to earn quickly and view short-term profits as a legitimate path, a misconception he noted some Russians share about easy investing.
The model works by the initial victim contributing money and waiting to advance to the next level in a matrix. To speed this up, new investors are needed. When the target level is reached, the investor receives a payout.
“When the flow of new victims stops, the pyramid collapses and organizers vanish, often moving online without regional ties,” Saikin explained. He cited SocialLIFT and OASIS-MATRIX as examples of matrix pyramids.
Scheme 3. The so-called educational resource
These pyramids masquerade as internet educational platforms offering courses from supposed experts across various fields.
“But during trial access, it is rarely possible to view a sample lecture from one of the so‑called experts. If a person subscribes with an initial investment of around ten thousand rubles, the quality of educational material often falls short. The platform’s trick is to attract others to join the program and profit from their subscriptions”, the Central Bank representative said.
Creators claim you can afford the subscription and even earn a profit. Saikin noted that many who lure people into such deals are quick to cut off payments. These projects can be promoted by popular bloggers to gain trust among followers.
Saikin emphasized that learning content is typically unavailable in advance and participation of others is required to succeed in the program.
The Central Bank maintains on its official site a list of companies found to engage in illegal activities, including financial pyramids. The list is updated daily and currently includes thousands of entities.
“If a financial company appears on this list, investing should be avoided at all costs,” Saikin warned.
The Central Bank’s educational project, Rublerost, helps identify the main signs of pyramids quickly, such as hidden cheats common on scam sites, he added.
Data from the Main Directorate of the Central Federal District of the Central Bank of Russia shows that in the first half of 2023, Moscow identified 148 organizations showing signs of illegal activity in the financial market, a 32 percent increase from the same period the year before.