Russia Faces Surge in Crypto Crime, Supreme Court Prepares Legislation

Russia has been grappling with a surge in crimes connected to crypto, according to the country’s Supreme Court.

At a recent meeting attended by President Vladimir Putin, Irina Podnosova, Chairperson of the Russian Supreme Court, said that digital assets are playing an increasingly central role in criminal activities across the nation.

“With the spread of cryptocurrency in the economy, there has been a rise in crimes where the digital currency is either the means of committing the crime, the criminal income, or the object of the offense,” Podnosova said at the annual meeting of judges of general jurisdiction, military, and arbitral tribunals.

The Supreme Court is reportedly preparing a legislative initiative that would recognize crypto as property in criminal cases.

Russia is also confronting the economic fallout from illegal crypto mining, which continues to plague the country’s energy sector.

Russian power company Rosseti Group revealed illegal mining activities have caused over $14 million in damages to the power grid in 2024 alone, state-owned news agency TASS recently reported.

The most affected regions are the North Caucasus, Novosibirsk, and Volga, where mining operations are straining the national grid and damaging both industrial and household equipment.

The Russian government has implemented seasonal mining bans in several regions, with these restrictions set to last until 2031.

These measures, alongside proposals for a national registry of mining equipment, aim to curb the spread of illegal operations.

Authorities are also considering imposing stricter penalties, including criminal charges and fines, to deter offenders and protect critical infrastructure.

Russia and crypto

Despite its crackdown on illicit crypto activities, Russia’s complex relationship with crypto is becoming more evident.

While enforcing tougher regulations to combat internal crypto crime, the country is simultaneously embracing crypto to evade Western sanctions.

According to a recent report by blockchain analytics platform Chainalysis, Russia’s illicit crypto activities continue to thrive as new non-compliant exchanges rapidly emerge to replace those shut down by authorities.