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Russian Secret Service Demanded $1M Bitcoin Bribe From Media Mogul

Esther Kim | Apr 19, 2019 | 16:00

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Bitcoin hit the headlines in Russia again this week after it emerged the country’s law enforcement had tried to extract a bitcoin bribe worth $1 million.

FSB Illegally Sought $1.02 Million

As local cryptocurrency news media outlet Coinspot.io reported April 17, a scandal involving Russia’s secret police and the ex-head of one of the country’s biggest newspapers has boiled over, with both parties now finding themselves under arrest.

According to an ongoing court case, up to 15 members of Russia’s FSB secret service may have tried to squeeze 65 million rubles ($1.02 million) out of the estate of a media mogul in return for his freedom.

The suspect, Izvestiya ex-CEO Erast Galumov, is allegedly wanted on charges of fraud involving 43 million rubles ($670,000). Lawyers continue to query whether any wrongdoing ever took place.

According to events which have now come to light, members of an FSB bureau in Moscow, charged with investigating IT-related crimes, ended up using a pseudonym to threaten Galimov’s family.

In return for Galimov’s freedom and their safety, they said, the family would have to transfer ransom money exclusively in Bitcoin to an arranged recipient.

One of the two figures in charge of the operation, an agent by the name of Kolbov, orchestrated the bribe under the name Mikhail, also telling Gamilov’s son he should leave Russia to avoid “doing time for his father.”

In the event, several instalments of the bribe reached Kolbov and fellow perpetrator, agent Sergey Belorusov, as part of a sting operation.

A Moscow court is now determining the fate of the agents, while Galimov will nonetheless still have to protest his innocence as his own legal battle continues.

Bitcoin, Regulation And Government Impotence

The embarrassment adds further fuel to the fire regarding Russia’s increasingly erratic attempts to control cryptocurrency use.

As Bitcoinist reported Friday, lawmakers appear unable to get to grips with the nature of decentralized networks, reflected in their latest plans to impose investment limits on Bitcoin and altcoins.

Russia has long sought to introduce hard-and-fast regulation of crypto, the expectation being that new laws will come into effect in Q4 this year. The language of the bills, critics say, nonetheless remains overly broad and fails to describe the nature of the phenomenon adequately.

Earlier in April, Bitcoinist also noted a surprising claim by a Kremlin economist that the Russian government has been covertly amassing Bitcoin worth $8.6 billion.

Last week, meanwhile, the same economist ridiculed plans by Russia and China to launch a gold-backed cryptocurrency, saying it would be automatically inferior to Bitcoin.

What do you think about the Russian police bribe scandal? Let us know in the comments below!

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