On February 10th, the Russian State Duma passed a law in its third reading, establishing the procedure for the seizure and confiscation of digital currencies in criminal proceedings. For these purposes, cryptocurrency is recognized as property.
According to experts consulted by ForkLog, while the document creates a legal basis for confiscation, it fails to address critically important issues. It lacks a methodology for assessing volatile assets, rules for their subsequent storage, and details of practical interaction with foreign crypto platforms under sanctions.
What does the law say?
The seizure of digital currency and devices providing access to it is carried out during investigative actions with the participation of a specialist. The protocol specifies the type of asset, its quantity, and address identifiers. Carriers and information for accessing cryptocurrency are stored in a sealed manner.
“If technically possible,” digital currency may be transferred to a special address for safekeeping. The procedure for this and subsequent storage will be determined by the Russian government.
After seizure, operations with these assets are completely or partially halted depending on the court’s decision. Cryptocurrency platforms are required to provide information of interest to the investigation.
The law awaits approval by the Federation Council and the president’s signature. It will come into force ten days after publication.
Framework without details
The document, developed by the Russian Ministry of Justice in May 2025, outlines only the general framework for enforcement. Specific details will be formed through subordinate acts.
For instance, the law does not include a method for calculating the amount of damage to be compensated through crypto assets, considering their volatility. The need for a mechanism to assess the value of digital currencies was particularly mentioned by the State Duma’s Financial Market Committee in its conclusion on the document.
Ignat Likhunov, founder of the legal agency Cartesius, suggested in a comment to ForkLog that courts will rely on general practice for property crimes — where damage is most often assessed based on the market value of the asset at the time of the offense.
“Regarding claims of ‘lost profits’ due to the temporary seizure of assets, in criminal proceedings, mainly actual damage is subject to recovery, not lost income. Although in theory, such claims are possible within civil proceedings, in practice, their satisfaction is a complex and unclear issue, which in most cases hinges on real access to the crypto,” explained the lawyer.
He pointed to the law’s key stipulation of “technical possibility” for transferring seized funds. According to Likhunov, if the owner of a non-custodial wallet refuses to provide access (private keys or seed phrase), a forced transfer will be impossible — the investigator will only be able to seize the physical carrier itself.
Questions also arise regarding future interactions with crypto exchanges.
“To avoid risks, major international platforms may ignore requests from Russian law enforcement agencies, especially if they have subsidiaries in EU jurisdictions, where there are direct bans on providing services to Russian residents, again due to the sanctions regime,” commented the expert.
Stablecoins (such as USDT, USDC), whose issuers can freeze funds only at the request of US or EU regulators, present a particular challenge.
Until specific government directives are issued, cybersecurity measures for protecting the special state wallet and penalties for those responsible in case of its breach or compromise remain undefined.
There is a risk of asset misappropriation by unscrupulous employees.
“The mandatory involvement of an IT specialist in the seizure and recording in the protocol are more procedural features than effective protection. Real security will depend on the quality of internal instructions and the effectiveness of departmental oversight,” Likhunov emphasized.
Rejection of a unified platform
By October 1, 2024, the Ministry of Finance, at the request of the Ministry of Internal Affairs, was supposed to explore the creation of a state digital platform for storing confiscated cryptocurrencies.
Based on the text of the adopted law, by 2026, the idea of a “super-service” has transformed into a system of special crypto wallets controlled by the state. The technical regulations for their operation are still unknown and will be approved by subordinate acts.
Additionally, the mechanism for selling confiscated digital assets for state revenue will need to be refined.
Andrey Tugarin, founder of GMT Legal, noted in a comment to ForkLog that a draft law on comprehensive regulation of the organization of digital currency circulation, which will soon be submitted to the State Duma, will address some of these issues. It will introduce mandatory requirements for crypto exchanges, including the storage of assets in digital depositories.
“Depositories will perform the function of this ‘technical possibility’ referred to in the articles on the arrest and seizure of digital currency. They will work for both private and state needs, ensuring safe storage. Until the central bank sees such a guarantee, depositories are unlikely to operate, as are the provisions of the adopted law in full,” concluded the expert.
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Discussions about the need to include cryptocurrencies in criminal law for investigating theft cases and the possibility of seizure have been ongoing since 2021. Even then, the Prosecutor General’s Office presented the first norms allowing digital assets to be recognized as the subject of a crime and confiscated.
Russia already had some practice in these procedures, although not always successful.
If you are interested in the technical aspects of cryptocurrency seizure, read the special material on ForkLog.