The Tverskoy District Court of Moscow has handed down a harsh sentence to Krasnodar crypto artist Sergei Galanter. On July 3, the creator of a project disguised as high-yield investments in erotic NFTs received seven years in a general-regime penal colony and a fine of 1 million rubles. The scale of the fraud is impressive: under the guise of investments in digital art, Galanter attracted over 200 investors and collected about $6 million.
The promised payments never reached the participants. Notably, the punishment turned out to be significantly stricter than what the prosecution had requested—the state's case had argued for six years of imprisonment and a fine of 500,000 rubles. The judge took into account the increased public danger of the act, which is extremely rare in practice.
How the scheme worked
Law enforcement authorities detained Galanter in December 2023. The man, who called himself an investor in the metaverse, promised clients colossal returns. Citizens were offered to invest cryptocurrency in erotic NFT paintings he had created. The organizer also readily accepted cash in envelopes. The minimum transfer amount was 500,000 rubles, and the largest single contribution reached $500,000.
Hype on social media helped attract gullible investors. The artist's wife, popular blogger Maria Afonina, ran an active advertising campaign. The spouse regularly portrayed her husband as a brilliant and financially responsible person. Followers brought their savings, inspired by the luxurious lifestyle showcased on the accounts.
Galanter spent the lion's share of the collected funds on personal needs. A smaller portion of the money was transferred to early investors to create the illusion of real income. To date, the criminal case includes 31 proven episodes of fraud.
Under heavy pressure from victims and the press, the project's creator acknowledged a debt of $6 million. The man publicly promised to pay 580 million rubles monthly through the sale of his art. However, the defendant categorically denied guilt under the criminal article, calling the project's collapse an ordinary cash flow gap.
The sentence turned out to be harsh
Judge Alexei Krivoruchko decided to impose a term stricter than what the state prosecution had proposed. Experienced lawyers emphasize that courts extremely rarely exceed the punishment requested by the prosecution. However, in this particular case, the defendant's actions were deemed to have increased public danger.
The implemented scheme had all the classic signs of a financial pyramid. Despite obvious evidence, Galanter stubbornly continued to deny guilt even under investigation. The project's author, until the very end, did not consider his personal activity to be illegal fraud. According to independent experts, with a maximum threshold of ten years, the imposed seven do not seem excessive. The court fairly took into account the gigantic scale and systematic nature of the crimes committed.
Actual compensation for damages could have mitigated the final decision of the court. By the time of the final hearing, the victims had not received any compensation, despite past promises. Additionally, the court fully granted large civil lawsuits from the victims. Currently, the defense side categorically disagrees with the verdict and intends to appeal the decision.
Expert opinion: This case is a clear marker that the Russian judicial system is beginning to perceive crypto schemes as a real threat, not just "newfangled" experiments. Seven years for "erotic NFTs" is a signal for all pseudo-innovators: hype and promises of metaverses will not protect against criminal liability if a classic pyramid lies behind the facade. Investors should remember: high returns, aggressive marketing through bloggers, and "exclusive" tokens are the three pillars on which savings sink.