Finiko Ponzi Scheme Arrest Appeals Rejected

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  • A Russian high court has rejected an appeal against the arrest of three Finiko Ponzi scheme associates
  • The three men fled Russia following the arrest of Finiko founder Kirill Doronin and scam promoters
  • Finiko took some $1.5 billion in cryptocurrencies after promising 30% monthly returns

A high court in Russia has rejected an appeal against the continued hunt for three members of the Finiko Ponzi scheme that took on $1.5 billion worth of cryptocurrencies from Russian and Ukrainian victims over 18 months. Zygmunt Zygmuntovich and Marat and Edward Sabirov, close associates of arrested Finiko founder Kirill Doronin, have skipped the country following a roundup of other high-ranking operators of Finiko this month, and an appeals court has rejected a claim that they should no longer be sought.

30% Monthly Returns

Doronin established Finiko in the southern city of Kazan in December 2019, promising investors returns of 20-30% per month, as well as the chance to purchase apartments and cars at discount. Instagram influencer Doronin was the face of the project, someone who had a history of running pyramid schemes, although this seems to only have been known by authorities as Finiko quickly gained traction.

Finiko launched its own cryptocurrency, the FNK token, in December last year, at which point the authorities took notice. Initially, the purchase of the FNK token was voluntary, but six months later, perhaps knowing authorities were closing in, Doronin announced that all transactions would be made in the FNK token. This caused the value of FNK to spike from $24 to $107 in one day, although this proved to be the high point, at which point presumably the founders sold their holdings as the price plummeted shortly afterward.

Finiko Halts Withdrawals

Finiko halted all payments and platform withdrawals in July, the biggest red flag when it comes to identifying cryptocurrency investment scams. Doronin announced on Instagram that he no longer had access to investors’ funds and the value of the token crashed further, reaching pennies just weeks after its $107 high.

Chainalysis claims that $1.5 billion worth of cryptocurrencies came into the platform with losses put somewhere between three and seven billion rubles ($34-$80 million). 80 individuals have so far been recognized as victims of the scam, although the number of depositors could be as high as 850,000.

Arrest Appeals Rejected

Doronin was arrested in July, with Finiko’s vice president, Ilgiz Shakirov, and two women, Lilia Nurieva and Dina Gabdullina, arrested this month for their part in the scam. Zygmuntovich and the Sabirov brothers, however, managed to leave the country and avoid detention. Government-appointed lawyers appealed the initial decision to seek their arrests internationally but this was rejected by the court, which means the hunt for the trio will go on.