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

Russian courts are hearing an increasing number of cases involving crypto assets, a new survey reveals. About two-thirds of these cases were initiated under the provisions of the country’s criminal code, but civil cases also account for a large percentage.

Nearly 1,000 criminal cases involving cryptocurrencies in Russia in 2021

Litigation related to cryptocurrency, digital asset exchange, and coin minting saw a serious increase in Russia during the past year, reaching a total of 1,531 cases. This figure comes from a survey conducted by cybersecurity firm RTM Group and cited by Izvestia this week.

Of these, 954 were initiated under various articles of the Russian Criminal Code, the paper wrote on Friday. Another quarter (365) were civil cases, almost a tenth (141) were bankruptcies, and 5% (71) were administrative cases, the article detailed.

The study authors note that cryptocurrencies most often appear in criminal cases related to drug trafficking, as the people behind such transactions want their payments to remain anonymous – 738 such cases were filed last year. There are also criminal proceedings involving the laundering of illicit funds using digital coins.

Claims for unjust enrichment from crypto transactions form the bulk of civil law disputes (42 cases). A common scenario is when a person sends money to a third party to purchase cryptocurrency but later receives less than expected or agreed upon.

Meanwhile, researchers found that the number of bankruptcy cases related to cryptocurrency ownership doubled in 2021. In these proceedings, the Russian judiciary refers to crypto assets as property, and the side is required to provide documentation proving that it owns the coins.

Illegal use of electricity for cryptocurrency mining is considered a civil offense in Russia, involving the collection of a debt. During the investigation period, Russians operating underground mining facilities had to pay 61.5 million rubles (more than $1.1 million at current rates) in nine such cases.

To prepare the report, RTM analyzed information obtained from published laws of courts of general jurisdiction and arbitration courts, as well as from official documents of various departments. The findings were published as authorities in Moscow continue to debate the legal status of cryptocurrencies in Russia.

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