Three Russian men are facing criminal charges after they were linked to the illegitimate conversion of approximately $10 million worth of Bitcoin into Russian rubles.
The three individuals, who were apprehended in Kostroma, allegedly conducted their illegal banking schemes using hundreds of bank cards and SIM cards that were believed to contain the Bitcoin funds they stole.
This is according to statements from the police and a press officer from the Ministry of Internal Affairs in Russia.
According to reports from prosecutors, the trio is said to have been covering up their tracks by transferring the funds through family members’ bank accounts to avoid having an incriminating paper trail.
Their efforts, which ultimately failed, would have paid off to the tune of over 500 million rubles.
The First to Face Criminal Charges over Cryptocurrency
The arrest of the three Kostroma men marks the first time the Russian government will be pressing criminal charges against Bitcoin criminals in the country.
Previously, Russia had adopted a rather dismissive way of dealing with crimes related to cryptocurrency, where the courts simply blocked Bitcoin exchange websites that offered to convert digital currency into traditional currency.
The three men will be facing criminal charges for illegally banking and trading cryptocurrency in the country.
Their arrest was as a result of a joint effort by the local police in Kostroma and Federal Security Service officers.
This indicates that the authorities are beginning to take note of the widespread illegitimate Bitcoin trade within the country, and are focusing on the individuals believed to be behind the schemes.
This is despite the fact that there are several legal gray areas when it comes to the trade of cryptocurrencies in Russia.
Bitcoin trading in Russia remains a controversial phenomenon, receiving criticism from entities as high up as the Russian Central Bank, seeing that the country’s approach to regulating the digital currency is far from ideal.
Despite talks that the government should and will adopt strict, yet permissive regulatory practices to govern the use of Bitcoin within their borders, converting rubles into Bitcoin and vice versa is an activity that remains in mayhem.
Russia is Not Prepared for Bitcoin
The country’s deputy finance minister, Alexei Moiseev, has put forth a proposal to block out Bitcoin trading services to everyone but qualified investors. So far, the proposal is the only viable solution for the government, which seeks to keep track of all Bitcoin transactions in the country.
Nevertheless, it is far from an ideal solution since many more “unqualified” investors will be locked out of the lucrative venture.
Despite the lack of a seemingly solid plan from the Russian government, the Bitcoin community in Russia is certain that clear regulations are all that’s needed to stop the illegitimate trading of Bitcoin in the country.
Anatoliy Knyazev, an executive at EXANTE who shares the same sentiments as the Russian cryptocurrency community, is quoted as saying that making it legal to transfer rubles into bitcoin and vice versa will eradicate the illegal trading of the cryptocurrency completely.
Search for Regulatory Framework Continues
The country is currently struggling to find a balance between cracking down on money launderers and promoting the use of cryptocurrencies within its borders.
Cryptocurrencies such as Bitcoin and Ethereum are already being traded and used globally as the main type of currency on several online platforms.
Some developments in Russia bring the country closer to embracing cryptocurrency fully, including President Putin’s support of Ethereum.
It is up to Russia’s Ministry of Finance to implement a sound legal framework that will govern the use of cryptocurrencies in the country.
Until then, it is likely that more Bitcoin-related arrests will be made.