New Russian Law Aims to Allow Confiscating Crypto from Citizens

Given the decentralized nature of crypto, it will be difficult to draft such a law.

Russian authorities are planning to bring a legal structure that will allow them to confiscate Bitcoin and other cryptocurrencies, RBC reported on Thursday.

Citing anonymous sources, the publication detailed that the initiative will involve the Ministry of Internal Affairs, Rosfinmonitoring, the Prosecutor General’s Office, the Investigative Committee, the Justice Ministry, the FSB, the Federal Customs Service, and the Federal Security Service, along with the participation of the country’s Supreme Court.

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The agencies are aiming to bring the proposal by the end of 2021.

“The trend of a constant increase in the number of crimes using virtual assets, the insecurity of individuals from this type of criminal encroachment, of course, dictate the need to develop mechanisms for legal regulation and control over the circulation of virtual assets,” Alena Zelenovskaya, head of criminal and administrative law practice at NSA Amuleks, told the local publication.

Vague laws for crypto

The status of digital currencies in the country lies in a grey area. Though lawmakers are attempting to regulate the sector by bringing a new bill, it has been delayed multiple times.

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Though the agencies are determined in the prospect, it is still not clear how they will achieve to confiscate digital currencies, given their decentralized nature.

The report detailed that the digital currencies held by the exchanges can be easily confiscated after receiving a court order; however, it will be difficult to introduce such processes for coins stored at private wallets with private keys in control of the user.

The Russian government is also considering to create a cryptocurrency wallet for the transfer of confiscated funds.

Last month, the country’s banking association proposed to label the crypto mining activities with money mining status to properly regulate the growing industry.

Meanwhile, the country is also welcoming the adoption of digital currencies. Binance recently initiated trading with Russian rubles on its primary platform as its CEO believes that Russia is the key market for the growing industry.

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