The City Court of St. Petersburg in Russia made a judgement that legally acknowledged digital assets less than a week after the Russia’s Industry and Trade Minister Denis Manturov said that Russia would definitely legalize crypto as a means of payment.

Piron and Yevgeny Prigozhin were sentenced to nine and seven years in jail, respectively, by the City Court of St. Petersburg Pyotr, for extorting about $1 million in digital assets from another man.

The St. Petersburg City Court acknowledged cryptocurrencies as a form of payment throughout the trial, according to RBC, a crypto news outlet. The ruling is a first, according to prosecutors, because the Russian government has yet to decide on the legal status of cryptocurrencies.

In order to extort money, the offenders, who pretended to be law enforcement officers, threatened Shemet with criminal prosecution in 2018.

The couple, who were not security officers in fact, extorted 5 million rubles ($90,000) and 55 million rubles ($1 million) in digital assets from Shemet after staging a bogus arrest.

Pyotr Piron, one of the criminals, introduced himself to the victim, G.A. Shemet, as a Federal Security Service (FSB) officer four years ago. According to the story, he threatened Shemet with criminal prosecution in order to extract money from him in fiat and cryptocurrencies.

Piron solicited the help of an accomplice, Yevgeny Prigozhin, a former employee of the Russian Ministry of Internal Affairs, because Shemet did not think Piron was a security agent and refused to give him the money he requested.

They informed Shemet that an unlawful crypto circulation investigation would be carried out. They organized a bogus arrest of the crypto owner in the summer of 2018, and he handed over his fiat cash and crypto cache under threat of torture.

The extorted cryptocurrency was not taken into consideration in the city court’s initial verdict. The ruling said that cryptocurrency:

“Cryptocurrency is not a means of payment on the territory of the Russian Federation, therefore it cannot be recognized as an object of civil rights and a subject of a crime.”

Following an appeal, a cassation court ruled that cryptocurrencies can still be used as a payment method and returned the case to the first instance court.

The city court announced a revised decision that included the cryptocurrency payment without modifying the defendants’ sentence terms.

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This case comes after a district judge in St. Petersburg allowed law enforcement personnel to seize stolen cryptocurrency in another criminal case earlier this month. Investigators had requested the seizure of a suspect’s two dozen cryptocurrency wallets, which contained 1 billion rubles in Ethereum.

Russia has passed a new cryptocurrency law that, while not as strict as the previous prohibition, places strict restrictions on the use of cryptocurrencies as a form of cash.

Denis Manturov, Russia’s Industry and Trade Minister, noted last week that the government and central bank will “sooner or later” legalize cryptocurrencies as a means of payment, implying that the government and central bank are getting closer to a solution.

Moscow has stated its intention to create a central bank digital currency, but has previously discouraged the use of private cryptocurrencies.

The judgement will set a precedent for the Russian government’s future decisions on the legal status of Bitcoin and other digital assets, according to the prosecutor’s office in St. Petersburg.

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