Cryptocurrency-Related Convictions in Russia Surge by 5000%

In recent years, Russia has witnessed a staggering increase in convictions related to cryptocurrency-related crimes. According to Alexander Volevodz, head of the Department of Criminal Law, Criminal Procedure, and Forensics at the Moscow State Institute of International Relations (MGIMO) under the Ministry of Foreign Affairs of Russia, the number of legal judgments in cases involving economic cryptocurrency crimes has surged by almost 5000% in just a year between 2017 and 2021.

The emergence of cryptocurrency-related crimes in Russia dates back to 2012, primarily centered around activities involving the illicit trade of narcotics through computer networks. During the five-year period from August 2012 to October 2017, there were 71 convictions related to cryptocurrency crimes associated with drug-related activities and only one conviction concerning another illegal cryptocurrency use. In total, there were 72 convictions during this period.

However, between 2017 and 2021, a mere four-year span, there were over 2,500 convictions related to cases where cryptocurrency was either a target of criminal activity or a tool used in the commission of crimes. This resulted in an average annual increase of 1100% in the number of convictions, as reported by Volevodz.

Volevodz further clarified that this surge in convictions primarily pertains to economic crimes involving cryptocurrency, including theft, fraud, financial pyramid schemes, and cryptocurrency initial coin offerings (ICOs). Additionally, he noted that the scope of such crimes continues to expand, encompassing bribery, terrorism financing, and various other forms of illegal activities.

Despite the remarkable increase in convictions, it is estimated that only a fraction of cryptocurrency-related crimes are exposed. Approximately 60-70% of illegal cryptocurrency usage remains concealed. Two key challenges hinder their disclosure. First, all these crimes require active international cooperation, which is currently complicated. Second, the absence of legal regulations and cryptocurrency status in the country presents another obstacle.

According to a study conducted by the RTM Group, Russia witnessed a total of 1758 legal decisions related to cryptocurrencies in 2022. Experts predict that by the end of 2023, this number is expected to rise to 2000 on an annual basis, signifying the growing significance of cryptocurrency-related issues in Russia's legal landscape.