Valeria Fedyakina, also known as ‘Bitmama’ among crypto investors, has been arrested in Moscow for allegedly defrauding a client out of nearly 7 billion rubles ($72 million). It was reported that the businesswoman was detained earlier this month, but news of her arrest did not break until Sunday.
The 28-year-old gained a reputation in crypto circles after her successful work with crypto exchanges, which have become especially popular in Russia amid Western sanctions on Russian banks. Fedyakina received cash from her clients and promised to withdraw the money in another country and offered an additional bonus to these withdrawals instead of charging a commission.
The entrepreneur explained the unusual business model by pointing to her supposedly extensive connections with business representatives and state corporations, which allowed her to withdraw money with a profit.
According to Russian media reports, Fedyakina worked almost exclusively with wealthy clients, and her daily turnover reportedly amounted to tens of millions of dollars. However, after she disappeared in mid-September, suspicions began to arise that she had organized a financial pyramid scheme and did not intend to return the money.
The Readovka Telegram channel suggested that Fedyakina is believed to have stolen as much as $150 million.
As reported by the Telegram channel Baza, Bitmama was detained by the Russian authorities on September 15 after conducting a suspicious transaction. That was after one of her clients accused her of fraud. The victim claims to have given the entrepreneur 6.7 billion rubles with the understanding that Fedyakina would return it with a 1% bonus.
However, after handing over the money, the man realized he had apparently been cheated and it would not be returned, prompting him to contact the police.
Bitmama currently faces up to ten years in prison for fraud if convicted. Despite reportedly being six months pregnant, she is being held in jail awaiting trial. It is believed that she was refused bail because she has a residence permit for the United Arab Emirates.
Earlier this year, a number of online Russian celebrities also faced charges of money laundering and tax evasion. Motivational speaker Elena Blinovskaya, who is considered one of the highest earning Russian social media stars, admitted to failing to pay over $11 million in taxes and falsifying business records in order to hide her income.
Before that, fitness guru Valeria Chekalina and her husband were charged with failing to pay over $4 million in taxes. Prominent Russian blogger Aleksandra Mitroshina also admitted to evading $1.2 million in taxes.