Russian media reported that the City Court of St. Petersburg has recognized the large amount of cryptocurrency handed over by the victim in the extortion case as a means of payment. The prosecutor’s office in Russia’s second-largest city describes the decision as a precedent.
Two men sentenced for cryptocurrency extortion in Russia
Two Russian nationals have been sentenced to nine and seven years in prison under strict regimes for extorting 5 million rubles (about $90,000) in cash and 55 million rubles (close to $1 million) in digital assets from another person.
During the trial, the St Petersburg City Court recognized cryptocurrency as a means of payment, the crypto page of Russian business news portal RBC reported. Prosecutors consider the decision first, as the government in Moscow has yet to determine the legal status of bitcoin and the like.
Four years earlier, one of the perpetrators, Pyotr Piron, introduced himself as an officer of the Federal Security Service (FSB) to the victim, GA Shemet. He threatened to criminally prosecute Shemet for extorting money from him in the form of fiat and cryptocurrency, the article details.
As Shemet did not believe that Piron was a security officer and refused to fund him, the latter enlisted the services of an associate of Yevgeny Prigozhin, a former employee of the Russian Ministry of Internal Affairs (MVD).
The duo told Shemet that a criminal investigation would be launched against him for the alleged illegal circulation of cryptocurrencies. In the summer of 2018, he staged the fake arrest of a crypto owner who, under threat of torture, handed over fiat cash and his crypto stash.
The city court’s initial ruling did not take into account erroneous cryptocurrency. It said in the ruling that cryptocurrency “is not a means of payment in the territory of the Russian Federation, therefore it cannot be recognized as an object of civil rights and a subject of a crime.”
Following an appeal, the Cassation Court declared that cryptocurrency could be considered a means of payment and returned the case to a court of first instance. Without changing the defendants’ jail terms, the city court issued a new ruling adding digital cash.
The development comes after last month, a district court in St Petersburg allowed law enforcement officials to confiscate stolen cryptocurrency in another criminal case. Investigators sought to seize two dozen crypto wallets belonging to a suspect holding 1 billion rubles in Ethereum (ETH).
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