The Supreme Court of the Russian Federation overturned the verdict in the part acquitting the defendant of laundering bitcoins by converting them into rubles and transferring the funds to bank cards. This is reported by РАПСИ.
According to case materials, the defendant stored precursors of narcotic drugs and, as part of an organised group, produced mephedrone in particularly large quantities. He received payments in cryptocurrencies, which he then converted into rubles and sent to the accounts and cards of the daughter of his live-in partner.
The trial court found the defendant guilty of illegal trafficking of narcotics, but acquitted him of money-laundering. The decision was motivated by the view that proceeds transformed from bitcoin, when not inserted into economic circulation, did not acquire legitimate ownership of these assets.
The cassation appeal was filed by the deputy prosecutor general; he pointed out that the defendant deliberately carried out these financial operations and brought into legitimate circulation more than 8.2 million rubles.
“In carrying out financial operations the defendant used banking technologies that allowed him to evade banking-control procedures and exclude the possibility of identifying the owners of the accounts and the persons executing the indicated operations,” the prosecutors added.
The defendant himself did not deny this during questioning.
The appellate court agreed with the first-instance ruling acquitting the defendant, but in the Supreme Court’s assessment, its wording “expressed extremely contradictory judgments.”
“At first, the appellate court stated that ‘without performing financial operations with cryptocurrency obtained by criminal means, including converting this virtual asset into rubles or another physical currency, [the defendant] would have been deprived of the opportunity to benefit from the results of his criminal activity,’ yet in the next paragraph of its ruling it summarized that ‘cash withdrawals did not lead to their legalization,’” the Supreme Court noted.
Relying on the latest edition of the Criminal Code of the Russian Federation, the Supreme Court stated that converting cryptocurrencies and transferring them to bank cards of third parties is, to the defendant, deliberately masking the link between the laundered property and the criminal origin of its funds. All this indicates an intention to launder the money.
“Contrary to the conclusions of the first- and appellate courts, for the existence of the elements of money laundering it is not required to involve funds in economic circulation, since liability under the relevant article arises from establishing the fact of making financial operations with the aim of giving a legitimate appearance to the ownership, use and disposal of money or other property,” the Supreme Court stressed.
Due to a substantial violation of criminal law that affected the outcome of the case, the conviction in the acquittal portion cannot be deemed lawful or justified. The Judicial Board referred this part of the case for a new consideration to the Ryazan Regional Court.
Earlier, in February 2019, the plenary of the Supreme Court legislatively prohibited laundering income transformed from virtual assets. The amendments were incorporated into the court’s 2015 ruling on the practice in cases involving the legalization of income.