Russia’s central bank warns scammers weaponized memecoins, tap-to-earn games

The Bank of Russia has issued a public warning, stating that bad actors are increasingly using memecoins and tap-to-earn games to deceive victims.

Russia‘s central bank released a report on Monday detailing a rapid increase in financial scams within the first half of 2024, highlighting a significant rise in fraudulent activities linked to memecoins and tap-to-earn games.

According to the document, the central bank discovered that over 3,490 entities in the first six months of 2024 exhibited features of Ponzi schemes, representing a 43% increase compared to the same period in 2023.

A substantial portion of these Ponzi schemes were found in the sector of economic games like tap-to-earn, which are token-focused mobile applications that gained traction after Telegram‘s founder Pavel Durov started actively promoting them. The Bank of Russia didn’t specify any particular projects but emphasized that scammers are exploiting “viral media trends” to lure victims.

Leveraging ‘hype’

“They [scammers] leverage viral media trends for promotion, such as the hype around popular clicker games and memecoins. Over 14% of illegal projects operated in the form of economic games,” The Bank of Russia noted.

The central bank also observed an increase in “mixed” schemes, which offer users supposed investment opportunities as well as trading in various assets, including forex pairs and cryptocurrencies. The report indicated that 59% of suspected Ponzi schemes accepted contributions in cryptocurrencies, while 36% used foreign payment services.

Tap-to-earn games have surged in popularity across Eurasia, enabling users to earn digital points — with the promise of converting them into real tokens — by performing simple actions like tapping the screen repeatedly. These games became widely popular due to their low entry barriers and the appeal of earning rewards with minimal effort.

Telegram-based Notcoin (NOT) led this trend, generating significant interest with its viral marketing and gamified earning strategies. Subsequently, other tap-to-earn games also emerged, but primarily on Telegram. The latest, Hamster Kombat (HMSTR), has even come under scrutiny from a Russian lawmaker who has called for these applications to be banned in Russia due to scam concerns.