Crypto-related Criminal Cases Rise by 40% Year-on-Year in Russia

Source: AdobeStock / Andrey Milkin

There has been a spike in crypto-related legal activity in Russia – with case numbers growing fast both in the criminal and civil courts.

Per the media outlet Izvestia, researchers from the cybersecurity outfit RTM Group compiled a report showing that 1,531 legal cases related to cryptoassets were launched last year – although these varied in topic from crypto exchange-related matters to illegal crypto mining.

The vast bulk of the cases – 954 – were criminal cases launched by the police and prosecutors, and the majority of these were related to drug trafficking. A number of cryptoasset-related cases were also money laundering-themed, while several were linked to illegal gambling organizations.

Of the 577 civil cases, most were “claims for the recovery of unjust enrichment” when “buying cryptocurrencies.” In most cases, this appears to be instances of small-scale fraud, whereby brokers (or bogus brokers) are alleged to have overcharged their clients for conducting crypto purchases on their clients’ behalf.

A further 9% of the civil cases pertained to bankruptcy proceedings.

Illegal crypto mining appears to be rising fast. Although mining is in a legal grey area – it is neither recognized as a financial activity nor outlawed – stealing electricity from the grid or using electricity intended to power public buildings and facilities as part of “underground” mining efforts has been on the rise in Russia. 

Recently, the head of a leading mental health care facility was arrested on charges of stealing the institution’s electricity to pay for his own crypto mining efforts.

The RTM Group noted that last year, individuals and companies based in Russia paid 61.5 million rubles (over USD 1m at the time of writing, but likely considerably more over the course of 2021) in nine cases of illegal electricity usage as part of crypto mining operations.

In the 738 drug-related cases recorded, the researchers claimed that criminals had “resorted to this method of payment” in an effort to “maintain their anonymity.”