The Elements of Fraud in the Crypto Space
In cases of cryptocurrency fraud the fate of the decision often depends on the criminal classification. Under the Criminal Code, fraud is the acquisition of another's property or of a property right by deception, with the aim of unlawful appropriation. In the world of digital assets deception takes many forms: fake investment platforms, schemes based on identity theft, fictitious exchange operations and others. The act is punished by a fine or community service for a term of one hundred and seventy to two hundred hours or corrective labour for a term of up to two years or house arrest for a term of one to two years or imprisonment for a term of two to four years. The defence strategy here demands precise analysis of the classification: the fact of deception, the aim of appropriation and the existence of damage must be established.
Aggravating Qualifying Features and Sanctions
The same act is punished more severely where additional features exist. Fraud committed by a group with prior conspiracy or causing significant damage is punished by a fine or imprisonment for a term of four to seven years. An act committed through abuse of official position, in large measure or repeatedly is punished by a fine or imprisonment for a term of six to nine years, while an act committed by an organised group or by a person previously convicted twice or more for unlawful appropriation of another's property or for extortion is punished by imprisonment for a term of seven to ten years. In crypto cases the correct assessment of the features of large measure and group commission directly determines the boundaries of the sentence.
Legalisation of Illegal Income
Cryptocurrency fraud is often followed by a charge of laundering the income received. Under the Criminal Code, legalisation of illegal income — that is, giving a lawful form to illegal or unjustified property (use of property, acquisition, possession, conversion, transfer or another action) with the aim of concealing its illegal or unjustified origin or of assisting another person in evading responsibility, as well as concealing or disguising its true nature, source of origin, location, placement, movement, ownership or other related rights — is punished by a fine or imprisonment for a term of three to six years. An act committed by a group, repeatedly or accompanied by receipt of income in large measure is punished by imprisonment for a term of six to nine years, and cases of an organised group, abuse of official position, especially large measure or activity on a political question connected with Georgia — by imprisonment for a term of nine to twelve years.
Large and Especially Large Measure
In applying the laundering rule the quantitative criteria are decisive: by the note to the law, large measure is income from thirty thousand to fifty thousand lari, and especially large measure is income above fifty thousand lari. For the same act a legal person is punished by liquidation or deprivation of the right to carry out activity and by a fine. The note to the law explains what illegal and unjustified property are: illegal is property, income or shares acquired by the person, a family member, a close relative or an associated person in violation of the requirements of law, and unjustified is property for which documents confirming lawful acquisition are lacking. In crypto disputes this means that the conversion of the value of exchange operations into lari and the establishment of the consistent measure is the central question for both prosecution and defence. A correct calculation of the measure changes the range of the sanction, so the defence must engage actively at this stage.
Frequently Asked Questions
What counts as fraud in crypto cases?
The acquisition of another's property or of a property right by deception with the aim of unlawful appropriation. In relation to digital assets this may be damage caused through a fake platform as well as convertible means obtained by deception.
What sanctions follow fraud?
The basic elements are punished by a fine or community service of one hundred and seventy to two hundred hours, corrective labour of up to two years, house arrest of one to two years or imprisonment of two to four years; qualified compositions — by stricter limits of up to seven to ten years.
What is large measure in laundering cases?
Large measure is income from thirty thousand to fifty thousand lari, and especially large measure is income above fifty thousand lari. These limits directly determine the range of the sanction.
Does a legal person answer for laundering?
Yes. For this act a legal person is punished by liquidation or deprivation of the right to carry out activity and by a fine.
How We Help on Legal.ge
The team of Legal.ge will assist you at every stage of the defence in cryptocurrency fraud cases: we assess the classification of the charge, conduct an independent analysis of the documents, prepare the defence position and represent your interests before the investigation and the court. Contact us as early as possible — early intervention changes the direction of the case.