Self-proclaimed Russian Cryptocurrency Expert “Bitmama” Sentenced to 7 Years in Prison for $23 Million Bitcoin Scam
A Moscow court has sentenced Valeria Fedyakina, a self-proclaimed cryptocurrency expert with an international network, to seven years in prison. She was convicted of running a massive fraud scheme that stole more than $23 million worth of Bitcoin in just two months in 2023, under the guise of legitimate cryptocurrency investments to evade international sanctions.
According to the indictment, Fedyakina convinced investors that she could move money abroad through a decentralized financial network, primarily in Dubai, which is considered a “crypto-friendly” and loosely regulated financial hub. She claimed to be able to help Russian individuals and businesses move assets around Western sanctions. In fact, the money quickly disappeared into her personal cryptocurrency wallets in the UAE.
According to investigators, the transactions were held in luxury hotels in Moscow, with cash flows ranging from $2–3 million per day, and later reaching $15 million. The entire operation was run informally under the names “Bitmama” and “Bitmama Finance,” without being registered with any financial regulator.
Fedyakina was arrested in September 2023 while trying to leave Russia for the UAE. At the time of her arrest, she was six months pregnant and gave birth while in custody at the SIZO No. 6 detention center in Moscow. On June 24, 2025, the Presnensky District Court formally sentenced her to seven years in a penal colony and ordered her to fully repay the $23 million to her victims.
Prosecutors initially sought the maximum sentence of 10 years under Russian fraud laws, amid evidence of the organization and professionalism of the scheme. She is accused of fabricating investments in shipping, oil, gold and minerals to gain investor confidence.
Experts say the case is a clear demonstration of the risks of the Russian cryptocurrency market, where underground financial activities are growing as the country tries to adapt to a global financial system that has been squeezed by sanctions.
Crypto criminals in Russia often exploit legal gaps, using digital wallets in loosely regulated regions like the UAE to hide their origins and move money across borders, according to Deddy Lavid, CEO of blockchain security firm Cyvers. Fedyakina is seen as a typical example of a decentralized fraud that uses the name of new technology to disguise a traditional financial scheme with sophisticated tricks.
Meanwhile, Alice Frei, head of security at Outset PR, said the “Bitmama” case represents a model of decentralized fraud, where individuals exploit investors’ ignorance or distrust to make a profit. Such schemes often use stablecoins such as USDT or USDC to secure value and transfer funds easily across borders, while also exploiting differences in governance between countries.
The Fedyakina case comes amid growing concerns about Russia’s use of cryptocurrencies to circumvent international sanctions and fund covert operations. A recent Reuters investigation revealed that Russia’s Federal Security Service (FSB) used Bitcoin to pay young and untrained agents operating in Europe. These activities are believed to be part of Russia’s increasingly sophisticated strategy of using financial technology to support hard-to-trace international operations.
Against this backdrop, the Russian Central Bank has also announced that it will allow qualified investors to access derivatives related to cryptocurrencies, marking a subtle but clear shift in the country’s approach to digital finance policy. However, the move still comes with the condition that such instruments cannot be physically transferred, in order to avoid exploitation or sanctions violations.
Taken together, the sentence against “Bitmama” reflects the tension in Russia’s digital finance strategy: on the one hand, it seeks to promote innovation and level the playing field for digital assets, while on the other hand, it faces a wave of financial crime and the misuse of new technologies for circumvention and personal gain. The incident also warns individual investors against attractive but non-transparent investment promises in the volatile cryptocurrency market.