Cryptocurrencies in Russia
The Supreme Court never said "illegal"
28 February 2019
There have been quite a few reports in the Russian press and social media that the Supreme Court has recognised conversion of cryptocurrencies into fiat currencies as a criminal offence. These reports are based on a wrong interpretation of the proposed amendments to the Decree of the Plenum of the Supreme Court No. 32 dated 7 July 2015 on court practice in the area of anti-money laundering (the Amendments).
The Amendments do not in any way criminalise the use of cryptocurrencies or their conversion into fiat currencies. What they actually do is recognise that fiat proceeds of virtual assets (cryptocurrencies) can be the subject matter of a money-laundering crime. This will be the case if virtual assets (cryptocurrencies) have been obtained by criminal means, such as hacking or theft, and if the purpose of the relevant financial operation or transaction is to conceal or disguise their illicit origin. According to the judge who presented the Amendments, they are driven by Russia's compliance undertakings to the Financial Action Task Force (FATF), as well as the much wider use of cryptocurrencies since 2015 when the original Decree was adopted.
The Amendments appear to be consistent with the approach to cryptocurrencies as a permitted object matter of civil rights previously taken by Russian courts (see our briefing Russian Court Issued the First Ever Decree Recognising Cryptocurrency as Property) and, if approved, should be a positive development in anticipation of adoption of cryptocurrency legislation in Russia.