The Supreme Court allowed the conversion of bitcoins into rubles to be considered laundering

The Supreme Court (SC) overturned the acquittal in the bitcoin legalization case. The court did not agree that the conversion of cryptocurrencies into rubles and their subsequent scatter on other people’s bank cards and accounts is not considered laundering, reports RAPSI with reference to materials affairs.

According to them (.pdf), the defendant illegally stored precursors of narcotic drugs on an especially large scale, and also, as part of an organized group, was engaged in the production of mephedrone. The goods were paid for with cryptocurrency, which the accused converted into rubles and transferred to the accounts and cards of his cohabitant’s daughter. The court found him guilty of drug trafficking, but acquitted him on charges of money laundering.

The verdict of the court of first instance stated that the performance of financial transactions with funds converted from bitcoins without introducing them into economic circulation does not indicate the legalization of proceeds from crime. The Deputy Prosecutor General did not agree with this, who indicated that the accused purposefully made financial transactions to transfer funds from a virtual account to bank cards and withdrew 8.2 million rubles.

The Court of Appeal agreed with the decision of the Court of First Instance. The Supreme Court considered that the court “expressed extremely contradictory judgments.” The Supreme Court stated that “the indicated financial transactions, knowingly for the perpetrator, mask the connection of the property being legalized with the criminal source of its origin.” In the highest instance, they noticed that the accused, while in the Moscow and Ryazan regions, converted bitcoins into rubles and transferred them to the cards of the daughter of the cohabitant “in order to give a legal form to the possession.”

“Contrary to the conclusions of the court of first and appeal instances, for the existence of a corpus delicti under Art. 174.1 of the Criminal Code of the Russian Federation does not require the mandatory involvement of legalized funds in economic circulation, since liability under this article of the law arises when the very fact of financial transactions is established in order to give a legal form to the possession, use and disposal of funds or other property, ”summed up the Supreme Court.

As a result, the highest authority considered that the sentence passed could not be recognized as legal and justified. The Judicial Collegium of the Supreme Court decided to send the criminal case for a new trial to the Ryazan Regional Court.

In November 2022 to the State Duma made a bill regulating the procedure for mining digital currencies and their subsequent sale. The adoption of this law should translate mining into a legal field. In the State Duma planned legalize cryptocurrency in Russia as a financial product in 2023.

About the draft law – in the material “Kommersant” “The digital ruble did not get into the wallet”.

Laura Keffer