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Russia’s plans on confiscating criminal crypto-assets

In an effort to curb issues related to cybercrime, the Russian Ministry of Internal Affairs including other authorities have started drawing up plans to allow cops to confiscate cryptocurrency assets.

“They intend to develop legislations by December 2021, which would allow the country’s law enforcement agencies to seize virtual assets linked with criminal accounts”, mentioned a report published in the Russian News Outlet RBC.

These steps are being taken to eliminate the legal murkiness that is surrounding the crypto in Russia at present.

The Ministry of Internal Affairs will be supported by the office of the Prosecutor General, the Ministry of Justice, the Federal Customs Service, the Investigative Committee, the Federal Security Service, as well as the Supreme Court.

Regulations addressing the use of crypto assets have been long-awaited but proposals for the same were held up for a long time in the Russian parliament, which further complicated the issues. According to the ministry, a legal definition for cryptocurrency- either commodity or equivalent cash, will facilitate easy forfeiture as well. However, definitions that are going to be set in the new rules book, may not be appropriate as there are potential issues down the road.

According to RBC sources, regulators are aware of the difficulties in confiscating crypto assets being protected in wallets that are either encrypted or secured with passwords.

Despite the fact, authorities have the belief that they will be able to work with currency exchanges to isolate or freeze funds, said Nikita Kulikov, member of the State Duma’s Expert Council and founder of Pravo Robotov Autonomous, a Russian non-profit organization.

“Additionally, agencies may be required to develop their crypto wallets to determine ways in which the digital assets can be exchanged with fiat money. A state crypto exchange and crypto ruble with a stable rate will be created to store the funds that are withdrawn”, Kulikov added.

While law enforcement agencies advance in the direction of being acquainted with cryptocurrency, Russian Central Bank is still in a process to maintain indifference. As per a statement provided by Evira Nabiullina, the Chairwoman of the Bank of Russia, there are no pressing reasons to launch a digital ruble currency following internal research.

It would be interesting to witness steps that the Ministry would take to address these issues.

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