Key Takeaways
- Russia plans to amend its law to add crypto-related terms to the criminal code.
- The bill aims to clarify crypto handling procedures but may raise questions about previous court seizures.
- The Ministry of Justice acknowledges that tackling the seizure of digital assets will be challenging, given the specific circumstances of their custody.
Russia plans to amend its existing law by adding crypto-related terms to the criminal code, enabling law enforcers to confiscate cryptocurrencies during investigations.
According to a draft bill presented to the State Duma by the Ministry of Justice, the current criminal code lacks the legal status to deal with crypto-related cases, causing complications for the police and prosecutors.
Protect the Rights of Law-Abiding Citizens
The ministry officials stated that the absence of legal definitions for crypto-related terms had made investigating cases and confiscating digital assets challenging, especially for cryptocurrencies held in online wallets. The experts say the bill will clarify crypto handling procedures but may raise questions about previous court seizures.
The Russian Ministry of Justice emphasizes that anonymity and the lack of centralized control over these assets have hampered these efforts. Some legal experts have welcomed the move, but concerns have been raised about protecting the rights of law-abiding citizens. Other experts stressed the need for law enforcement officials to be properly trained and equipped before the proposed changes are implemented.
The Right to Confiscate Physical Devices
Speaking at the 13th St. Petersburg International Legal Forum regarding the impact of new technologies on crime, the Ministry of Justice official stated that the bill regarding crypto-related terms would specify the procedures and considerations needed to expedite the seizure of these assets. Commenting, the Deputy Minister of Justice of the Russian Federation, Vadim Fedorov, said the bill would classify cryptocurrencies as property for arrest and confiscation purposes. He further stated:
“At the same time, it is proposed to establish special requirements to ensure its safety – taking into account the characteristics of a specific [digital] currency.”
The official added that the bill would include special clauses about the right to confiscate physical devices such as hardware wallets holding private keys suspected of being associated with criminal activities and ask courts to enact bans on transactions. Fedorov clarified the bill would detail the procedures to be followed in the context of crimes involving digital assets. He explained:
“Specialists are planned to be involved in the relevant procedural actions, who will determine the set of necessary measures to ensure the safety of digital currency for subsequent confiscation or settlement of the victims’ claims.”
Lack of Centralized Control
Even as the authorities plan to introduce crypto-related terms to the country’s criminal code, Fedorov acknowledged the challenges of tackling the seizure of digital assets, given the specific circumstances of their custody. He stressed that the current circumstances had made cryptocurrencies attractive to criminals due to the lack of centralized control. He stated:
“Digital currency cannot be physically seized and placed in a safe, as with cash and valuables.”
Conclusion
The Russian Federal Bailiff Service has recently said it has developed new methods to convert Bitcoin seized in criminal cases into cash for the Treasury. The decision to add crypto-related terms to the criminal code underscores the government’s efforts to integrate digital assets into the legal and financial framework, addressing the challenges posed by the evolving landscape of cryptocurrencies.
Frequently Asked Questions
Is Russia crypto-friendly?
Russia has been more open to crypto for a while now, at least when it comes to cross-border payments.
What is the cryptocurrency law in Russia?
In 2024, the Russian government approved a federal bill for new taxes on cryptocurrency transactions. The bill recognizes digital currency as property and imposes a 13%- 15% personal income tax on cryptocurrency sales.
What is the most used crypto in Russia?
According to available data, Bitcoin is the most used cryptocurrency, accounting for approximately 62 percent of the total search volume for cryptocurrencies in Russia, followed by Ethereum.
