The arrest marks the start of the first-ever criminal case against bitcoin sales in Russia, Vedomosti business daily reported on Sept. 1.  The Russian government has a balancing act to do: they want to show that crypto-currencies will not be tolerated as a money laundering unit, on one hand, while on the other hand want to show they are rolling out the welcome mat for bitcoin and similar technologies. It's the latter, or risk losing out on major, global, life changing opportunities going forward.

According to Ministry of Internal Affairs press officer, Irina Volk, the three defendants illegally cashed the millions in bitcoin and are being brought up on charges of  "Illegal Banking". Their names have been concealed. Arrests were made approximately 260 miles northeast of Moscow in the city of Kostroma. The exchange came to light after investigators found an unusual amount of activity in bank accounts stemming from 300 bank cards and sim cards used to store the digital currency. The money was being shifted into different accounts owned by family members, prosecutors believe.

In the past, Russian courts have blocked bitcoin-exchanges and websites where people could transfer it into rubles, but they never brought anyone up on criminal charges for doing so. Russia surely has a problem with money laundering and where authorities believe it can crack down on activities, it will. Bitcoin, and Russia's No. 2 crypto-currency, Ether, are new ways for Russians to avoid taxes and hide cash from ill-gotten gains.