Russian court orders seizure of 24 Ethereum wallets in cryptocurrency theft case

A district court in Saint Petersburg authorized investigators to seize the stolen Ethereum coins held on the suspect’s wallets. This was reported by the unified press service of the local courts. The ruling constitutes a precedent in Russian judicial practice.

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In 2017, the plaintiff purchased 7,000 ETH. The offender gained access to the victim’s wallet and transferred the coins to his own address.

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The owner of the cryptocurrency reported to law enforcement. The investigation identified 24 wallets linked to the thief, containing 4,000 ETH of the stolen coins. The whereabouts of the remaining assets are unknown.

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“Cryptocurrency is used as a means of payment, investment and savings, i.e., it has material value, and is therefore recognised by the court as other property and evidence of the crime under the note to Article 158 of the RF Criminal Code, to which seizure may be imposed,” the press service said.

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In court they also concluded that the main difference between cryptocurrencies and money “is only the way they originate.” Because the notion of cryptocurrency is not enshrined in law, the seizure petition may designate them as other property, and the coins can be recovered, the press service added.

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The designation of cryptocurrencies as property appeared as early as the law “On Digital Financial Assets” (“On DFA”), which came into force in 2021. More detailed regulation should be laid out in a separate law “On Digital Currency.”

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The managing partner of GMT Legal, Andrey Tugarin, noted that it is indeed possible to recover cryptocurrency in Russia, and it will be seized as property. This is confirmed by the law “On DFA.”

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“If the precedent is successfully implemented, and not just a court decision on paper, it will create a more favourable environment for repeating such decisions and will allow victims to recover the crypto stolen from them,” the lawyer said.

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Tugarin stressed that he is not prepared to comment on the court’s decision, as of this writing he has not reviewed its reasoning and dispositive parts. However, in his view, the suspect was identified thanks to the verification procedure he had undergone earlier.

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“This case once again demonstrates that user verification carries very substantial weight.”

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Earlier, in 2018, the Moscow court issued a precedent-setting decision, obliging a bankrupt entrepreneur to grant the financial administrator access to a cryptocurrency wallet to top up the bankruptcy estate.

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At the end of last year, the head of the Russian Investigative Committee, Alexander Bastrykin, urged recognizing cryptocurrencies as property and to set out a procedure for seizing them.

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