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Tuesday, March 28, 2023

Crypto-Related Lawsuits Rising in Russia, Criminal Cases Increase by 40%

Crypto-Related Lawsuits Rising in Russia, Criminal Cases Increase by 40% – Over the course of last year, the number of lawsuits relating to cryptocurrency, digital asset exchanges, and coin minting increased dramatically in Russia, reaching 1,531. The figure comes from research undertaken by RTM Group, a cybersecurity firm, and was reported by Izvestia this week.

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According to the daily, the majority of these cases, 954 in total, were initiated under various provisions of the Russian Criminal Code. Another quarter of the proceedings, (365), are civil cases, nearly one-tenth (141) are bankruptcy cases, and 5% (71) are administrative cases, according to the article.

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According to the study’s authors, Cryptocurrency is most frequently used in criminal cases involving drug trafficking since those involved want their payments to remain anonymous – 738 such cases were filed last year. Laundering of unlawful funds using digital coins is another criminal proceeding.

The majority of civil law disputes (42 cases) involve claims of unjust enrichment from crypto transactions. When a person sends money to a third party to buy cryptocurrencies, the amount received is often less than expected or agreed upon.

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Meanwhile, according to the researchers, the number of bankruptcy cases involving cryptocurrency ownership has increased in 2021. The Russian judiciary refers to crypto assets as property in these procedures, and both parties are expected to present documents showing ownership of the coins.

In Russia, illegally using electricity for cryptocurrency mining is considered a civil violation that implies debt collection. In nine similar cases during the study period, Russians operating underground mining sites were forced to pay 61.5 million rubles (nearly $1.1 million at current rates).

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RTM reviewed published actions of general jurisdiction and arbitration courts, as well as information gathered from official correspondence of several departments, in order to prepare its report. The results of the study are being released as authorities in Moscow continue to debate the legal status of cryptocurrencies in Russia.

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