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Azerbaijan confiscates cryptocurrency in favor of state for first time, defendants fined over AZN 35 million

24 August 2026 09:49 (UTC +04:00)

The court proceedings in the criminal case against B.H.R. and I.R.F., who were arrested by the State Security Service (SSS) of the Republic of Azerbaijan, have concluded. It should be noted that, for the first time in practice, the proceedings were distinguished by the confiscation of cryptocurrency in favor of the state, APA reports.

According to the verdict of the Yasamal District Court, the accused were found guilty under Article 206-1.3 of the Criminal Code of organizing the illegal covert transfer of especially large amounts of money from the Republic of Azerbaijan to a foreign country or from a foreign country to the Republic of Azerbaijan through offsetting and other methods of mutual settlements. B.H.R. was sentenced to restriction of liberty for 2 years and 5 months and a fine of 3 million 623 thousand 568 manats, while I.R.F. was sentenced to restriction of liberty for 3 years and a fine of 31 million 399 thousand 709 manats.

At the same time, under 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 gratuitous seizure in favor of the state of instruments and means used in the commission of a crime, as well as property obtained through criminal activity. At the same time, according to Article 1.1 of the Law of the Republic of Azerbaijan “On Combating the Legalization of Criminally Obtained Property and the Financing of Terrorism,” property obtained through criminal activity also includes virtual assets.

The mechanism for implementing the confiscation of cryptocurrency in favor of the state is practically a novelty, and the relevant issue has been widely discussed in the media. In this regard, this area, which has remained unregulated until now, continues to be a relatively new field both in Azerbaijan and globally.

Recall that intensive work is underway toward the adoption of a law providing for the legal regulation of virtual assets and crypto markets in Azerbaijan.