The Yasamal District Court of Baku has issued a landmark ruling that will go down in the history of the country's law enforcement practice. Two defendants in the case, detained by the State Security Service, have been found guilty of organizing the illegal transfer of funds on an especially large scale. For the first time in Azerbaijan, the court ordered the confiscation of virtual assets recognized as the instrument of the crime in favor of the state.
The case concerns B.Kh.R. and I.R.F., who operated through international payment platforms and exchanges, conducting transactions outside the country. The verdict, delivered on August 24, concluded a lengthy process that began more than a year ago with the seizure of assets.
Details of the verdict and the scale of punishment
The court applied Article 206-1.3 of the Criminal Code, classifying the actions as organizing the covert transfer of funds on an especially large scale. The punishment proved severe: B.Kh.R. received a restriction of liberty for 2 years and 5 months and a fine of 3.623 million manats (about $2.13 million). His accomplice I.R.F. was sentenced to 3 years of restriction of liberty and a fine of 31.399 million manats (approximately $18.47 million).
The key point is the confiscation of 830 units of cryptocurrency held in accounts on the international platform Binance. The investigation seized these funds as early as the preliminary investigation stage, and now they have finally passed into state ownership. The official documents do not specify which coins are involved — BTC, ETH, or altcoins.
Legal framework: digital assets equated to property
The ruling is based on Article 99-1 of the Criminal Code, which provides for the special confiscation of the instruments and means of a crime. The Law "On Combating the Legalization of Criminally Obtained Property and the Financing of Terrorism" classifies virtual assets in the same category as material valuables. Thus, for the first time in practice, the court applied the same legal regime to digital currencies as to traditional property.
This is particularly significant given the absence of a special law on cryptocurrencies in Azerbaijan. The country's Central Bank previously stated that it expects the adoption of a corresponding bill by the end of 2026. However, the current precedent demonstrates that the legal vacuum is being filled in practice, and courts are ready to apply existing norms to new realities.
Context and significance for the market
In 2025, the State Security Service had already sought a court ruling to freeze crypto assets in a similar case, when the Sabail District Court of Baku ordered the blocking of funds. Now the process has moved to a new stage — actual confiscation. Experts note that international exchanges generally promptly execute court rulings, but the further fate of the confiscated assets — sale at auction, transfer to state reserves, or other use — remains uncertain for now.
My comment: This case is a clear signal for all participants in the unregulated crypto market in Azerbaijan and neighboring countries. The state no longer views digital assets as a "gray area" but is actively integrating them into the legal framework. For investors, this is a dual signal: on the one hand, the risk for shadow operations is growing; on the other, a basis for future legal regulation is emerging, which in the long term could strengthen trust in the market.