In a pivotal turn of events, Russia’s Supreme Court has ruled that the conversion of Bitcoin (BTC) to fiat currencies by those engaged in illegal activities may indeed be classified as money laundering. This judgement came in relation to a case tied to an individual selling narcotics bought via digital cash. Rendered payments for these narcotics were completed in Bitcoin, which were later traded for fiat rubles.
Interestingly, the funds – amounting to roughly $100,000 – then found their way into the bank accounts and cards of the convicted’s defacto partner’s daughter. While the man was rightfully served with a drug trafficking conviction by a lower court, charges of money laundering were swiped aside. The court deemed the financial transactions not to be “laundered” indicating that the converted Bitcoin was yet to be “introduced into economic circulation.”
Unsatisfied, prosecutors escalated the case to the High Court. It was here that the original verdict was upheld, leading to the case reaching the Supreme Court. Here, however, rulings turned a new page. The Criminal Code pertaining to “laundering of funds obtained by criminal means” was interpreted in a wider context, extending it to include all financial transactions concerning crime-related proceeds.
The Supreme Court’s verdict broke past precedent, identifying “funds converted from virtual assets” resulting from a crime as laundered capital. This breakthrough statement was supported by evidence of the convicted employing digital software, thus concealing the source of the funds cleared into his partner’s daughter’s accounts.
Consequently, this case sets a significant precedent for future crypto-related legal scenarios in Russia. It opens doors for boosted token seizure and liquidation, as digital asset convertibility to fiat is now possibly flagged as money laundering. Moreover, this decision could lead to more severe sentences for unlawful activities involving cryptocurrencies.
Just weeks ago, a Russian citizen was seized by the secret service for supposedly sending a crypto donation to the Ukrainian military and sued for treason. As the correlation of cryptocurrencies with cybercrime continues to escalate, the court’s judgement potentially brings much-needed legal clarity. This establishes a groundwork for future cases and regulations, particularly in crypto-centric illegal undertaking.
Source: Cryptonews
