I found a more in-depth article on theglobeandmail.com.
It takes a critical and researched approach over the issue, which is consistent to the type of answers needed in such cases.
Some highlights from the article (in case the link breaks after a while):
A new moral panic is working its way across Europe and will no doubt
be seized on by North American media. It is an account of a shadowy
online Russian suicide cult, apparently entrapping teenagers, called
the Blue Whale game. There is little evidence that the game has
actually caused suicides, or that it even exists. [...]
What the Blue Whale myth reflects, really, is not a suicide trend
among teenagers, but a creeping fear that the Internet itself can spy
on us and control us, the way a cult or an authoritarian state can.
A bit of history about it:
In May, 2016, the state-funded television network Russia Today (RT)
aired a news piece about pro-suicide groups on the social network
VKontakte (VK). A teenage girl had killed herself apparently after
joining one of these groups. The groups seduced teenagers with cryptic
videos filled with ciphers and codes. RT claimed there were dozens of
these groups and that many suicides were traceable to their influence.
It called the trend a "cyber suicide industrial complex."
Reason why people accept those "challenges":
Many of the reports on this phenomenon claim that if you don’t
complete the tasks, you are threatened with some kind of awful
retaliation, usually a threat to reveal some kind of secret (which of
course the moderator knows about, from having monitored your computer
use). You are told that the moderator knows exactly where your live,
because of your computer's IP address.
More recent events about it:
The story of the Blue Whale deaths was picked up in late February and
early March by British tabloids. The Daily Mail, the Daily Express and
the Sun ran stories about this potential new threat – by repeating the
claims made by the first Russian reports, and including the "130
Russian deaths" statistic.
However, when fact checking was attempted (emphasis mine):
Radio Free Europe has investigated the phenomenon and tried to
participate under aliases, but got nowhere. They point out that
neither the suicides nor the arrest have been definitively linked to
this game. Snopes, the respected hoax-monitoring website, has deemed
the story "unproven."
The whole reason why this urban myth appeared and is occassionally getting traction seems to be purely social-psychological in nature, with some artistic origins:
The fear of a widespread teenage suicide cult is not new. The victims
in reported or fictitious suicide clubs are usually teenage girls, not
boys, which reflects a larger societal obsession with teenage girls
and sexual violence. The notoriously gory 2001 Japanese horror film
Suicide Club exploited this fear: it depicts a spate of mysterious
deaths. It begins with 54 schoolgirls throwing themselves under a
train. As police investigate, they find a website that seems to be
predicting the deaths.
George Orwell predicted this in 1984. And Trump’s spokesperson,
Kellyanne Conway, is working this literary trope when she speaks of
"microwaves that turn into cameras."
The worst possible outcome of some Internet vigilante looking to
punish everyone for their secret crimes was imagined last year by a
particularly gruesome episode of Black Mirror called "Shut Up And
Dance." In it, various characters inadvertently download malware that
spies on them and finds a dark secret, such as the viewing of child
pornography. An anonymous hacker then blackmails the characters,
forcing them to commit increasingly violent and grave crimes to avoid
The conclusion of the article sums it up pretty nicely (emphasis mine):
The Blue Whale story is more contemporary in that it involves
computers as instruments of punishment for those who use them. It is
about control through surveillance. We commit our secrets to our
computers, in our private communications and our Internet searches and
our hidden photo files. We have discovered hackers can find any of our
secrets and that we may ourselves be inviting these malicious forces
into our lives by frequenting unwholesome sites. It is punishment for
our own immorality.
(....) one wonders if the news is simply science fiction (...). Here
is not a question of life imitating art, but of news drawing from art.
What the urban legend evinces is a real moral panic going on in the
world right now – a fear of surveillance, control and punishment by
the very systems of communication we depend on.
In conclusion, if the article is right, the whole story about the Blue-Whale looks like nothing more than urban legend. Personally, from my experience with humanity, this usually tends to be the case.