Russian Court Recognizes Cryptocurrency as Means of Payment, Prosecutors See Precedent

The St. Petersburg City Court has approved a large amount of cryptocurrency given by a victim in an extortion case as a means of payment, Russian media reported. The prosecutor’s office of Russia’s second-largest city described the ruling as a precedent.

Two Men Sentenced in Russia for Cryptocurrency Extortion

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Two Russians were sentenced to nine and seven years in prison under a strict regime for extorting 5 million rubles (about $90,000) in cash and 55 million rubles (about $1 million) in digital assets from another man The court was.

During the course of the trial, the St. Petersburg Municipal Court accepted cryptocurrencies as a means of payment, the crypto page of the Russian business news portal RBC reported. Prosecutors consider the ruling a first, as Moscow’s government has yet to decide on the legal status of Bitcoin and other cryptocurrencies.

Four years ago, one of the perpetrators, Pyotr Piron, introduced himself to the victim, G.A. Shemet, as an employee of the Federal Security Service (FSB). He threatened Shemet with criminal prosecution and extorted money from him in the form of fiat and cryptocurrency, the article detailed.

Shemet did not believe Piron was a security officer and refused to hand over the funds, so he asked Piron to offer his services to his accomplice, Evgeny Prigozhin, a former employee of the Russian Ministry of Internal Affairs (MVD).

The two told Shemet that a criminal investigation would be launched on suspicion of illegal circulation of cryptocurrency; in the summer of 2018 they staged a fake arrest of the crypto owner and handed over his crypto stash with fiat money under threat of torture.

The initial decision of the Municipal Court did not take into account the misappropriated crypto. It stated in the verdict that cryptocurrency “cannot be recognized as a subject of citizenship and a crime because it is not a means of payment on the territory of the Russian Federation.”

After appealing, the Grand Chamber returned the case to the court of first instance, declaring that cryptocurrency could nevertheless be considered a means of payment. The Municipal Court issued a new ruling, adding digital cash without changing the defendant’s prison term.

This development comes after a district court in St. Petersburg last month authorized law enforcement agencies to confiscate stolen cryptocurrency in a separate criminal case. Investigators had requested the seizure of two dozen crypto wallets of a suspect holding one billion rubles in Ethereum (ETH

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