Fine of over 35 million manats: cryptocurrency confiscated in Azerbaijan for the first time
The trial in the criminal case against B.Kh.R. and I.R.F., who were arrested by the State Security Service of the Republic of Azerbaijan (SSS), has concluded.
It should be noted that this process was notable for the first time in practice for the confiscation of cryptocurrency in favor of the state.
As APA reports, according to the verdict of the Yasamal District Court, the defendants were found guilty under Article 206-1.3 of the Criminal Code for organizing the illegal concealed transfer of funds on an especially large scale from the Republic of Azerbaijan to a foreign state or from a foreign state to the Republic of Azerbaijan through offsetting and other methods of mutual settlement. B.Kh.R. was sentenced to restriction of freedom for a term of 2 years and 5 months and a fine of 3 million 623 thousand 568 manats, and I.R.F. to restriction of freedom for a term of 3 years and a fine of 31 million 399 thousand 709 manats.
By the verdict, 830 units of cryptocurrency held in an account with the international virtual asset service provider Binance, which had been seized by a court decision during the preliminary investigation, were confiscated in favor of the state.
Note that, according to Article 99-1 of the Criminal Code, special confiscation provides for the compulsory and uncompensated seizure in favor of the state of the instruments and means used in the commission of a crime, as well as property obtained by criminal means. In addition, according to Article 1.1 of the Law of the Republic of Azerbaijan "On Combating the Legalization of Property Obtained by Criminal Means and the Financing of Terrorism," property obtained by criminal means is also understood to include virtual assets.
The mechanism for enforcing the confiscation of cryptocurrency in favor of the state is an innovation in practice, and the relevant issue is being widely discussed in the media. In this context, this area, which until now has remained unregulated, is a relatively new field not only for Azerbaijan but also on a global scale.
Recall that intensive work is underway in Azerbaijan to adopt a law providing for the legal regulation of virtual assets and cryptocurrency markets.
