Countering the Legalisation of Criminal Proceeds Using Cryptocurrency

Abstract

The aim and objectives of the study are to determine the range of measures to combat the legalisation (laundering) of criminal proceeds and counteract crimes committed using cryptocurrency. The article discusses the recommendations of the group on the development of financial measures to combat money laundering and terrorist financing (FATF), which since 2018 has begun to develop mandatory rules for regulating cryptocurrency exchanges and exchangers. The activities of the public authorities, which justify the lack of progress in this direction, refer to the information of the Central Bank of the Russian Federation `` On the Use of Private ``Virtual Currencies{''} (Cryptocurrency){''}, published on 04 September 2017, which stated that it was premature to allow for the circulation and use of cryptocurrency on organised markets and in the clearing and settlement infrastructure on the territory of the Russian Federation; therefore, at present, none of the three proposed bills, which could somehow regulate cryptocurrency activity in the Russian Federation, has been adopted. It is concluded that the main risks of the cryptocurrency industry are the legaliSation of proceeds from criminal activity using cryptocurrencies. In the Russian Federation, only the Federal Financial Monitoring Service assesses these risks and monitors legal entities' and individuals' compliance with laws on combating the legalisation (laundering) of proceeds from crime and the financing of terrorism. The empirical basis of the study was the data obtained as a result of the analysis and generalisation of the materials of more than 200 civil and criminal cases, one way or another related to the circulation of cryptocurrency in the Russian Federation. The methodological basis of the study was the general dialectical method of scientific knowledge, which has a universal character, as well as methods of logical deduction, induction, cognitive methods and techniques of observation, comparison, analysis, generalisation and description. The conclusion is substantiated that it is necessary to include in the criminal legislation the norms on responsibility for illegal circulation of cryptocurrencies, as a result of which the norms providing for responsibility for legalisation (laundering) of proceeds from crime (Articles 174 and 174.1 of the RF Criminal Code) will be more effective. At the same time, control over the implementation of the laws of the Russian Federation on combating the legalisation (laundering) of proceeds from crime and the financing of terrorism with the help of cryptocurrencies will be in the sphere of state regulation, which will ensure the normal functioning of economic activity and criminal protection of citizens' property rights.