A man was detained in the Russian city of Astrakhan by the police on accusations of defrauding people who wished to purchase crypto mining equipment.
According to law enforcement officials, the suspect in question made fictitious sales of mining equipment to Russian foreigners and citizens, which allowed him to make millions of rubles.
Hailing from Kazan, which is the capital city of the Republic of Tatarstan in Russia, a man was arrested in the southern city of Astrakhan.
He has allegedly defrauded about 10 local residents, along with several foreigners, who tried to purchase mining hardware from him.
Fake advertisements were posted by the Russian of mining hardware for sale and he demanded advance payments.
As per the estimates of law enforcement authorities, the man was able to make about 19 million rubles through this tactic.
The Ministry of Internal Affairs in the region of Astrakhan said that they had discovered the tempting offers the young man posted on the internet during the course of the investigation.
These offers were for selling crypto mining devices that he did not really have. Therefore, the Russian authorities initiated a criminal code against him for large-scale fraud.
According to the Criminal Code of Russia, this is Part 3 of Article 159.
A press release disclosed that the suspect would promise to deliver the crypto mining rigs to his victims if they would pay beforehand.
Approximately 936,000 rubles was transferred into his bank account by one of the buyers, after which he cut off all communications.
If the court finds him guilty, the fake crypto mining equipment seller could end up in prison for six years.
Russia has recorded a rise in cases of theft and fraud related to crypto mining, as the process of digital coin extraction has gained a lot of popularity.
Not only are companies engaging in it because of its profitability, but individuals are also using it as an income source.
A mining hotel in Irkutsk had become the target of theft back in June when mining equipment valued at $1.9 million had been stolen.
A big crypto farm located near Moscow had also been robbed by masked men back in July. The arrested fraudsters hail from Tatarstan, which is where the largest Ponzi scheme in Russia was carried out in recent years.
This was known as the Finiko pyramid had attracted investors not just from Russia, but also from Europe, the former-Soviet space and other countries.
All of them had been offered extraordinarily high profits and all they had to do was send some free bitcoins to the organization.
Chainalysis, the blockchain forensics firm, had disclosed in just a time span of two years, that the fraudulent company had managed to receive $1.5 billion worth of Bitcoin, which it had disappeared with.
Due to the rise in crypto-related activities in Russia, the government is now working on introducing regulations to oversee the space and to offer protection to those parts of the market.