Russian bankers propose criminal penalties for holding cryptocurrencies in non-custodial wallets

In the Association of Banks of Russia (ABR), a concept for recovering cryptocurrencies stored in non-custodial wallets has been developed. It envisages criminal liability for their owners. This was reported by Izvestia, citing the document.

The concept provides for criminal liability for the mere fact of holding assets in such wallets if the cryptocurrency has not been declared.

The ABR vice president Anatoly Kozlachkov called such an approach more logical, but noted that the association is considering introducing liability for refusing to provide keys to authorized authorities, rather than for owning non-custodial wallets.

When linking a debtor to a wallet, the individual must either surrender the key or face punishment for concealing assets in the form of digital assets, according to ABR.

The association says the measure would curb capital flight and level the playing field for all those obliged to pay taxes. It could also help the Central Bank and the Finance Ministry resolve conflicts in regulating cryptocurrencies, the ABR noted.

The organisation noted that technologies are actively used to link wallets to their owners and to connect assets to illicit activity.

The association developed its concept in cooperation with the Ministry of Internal Affairs. It has been sent to the central bank, the Ministry of Finance and Rosfinmonitoring, as well as to the State Duma’s working group on cryptocurrency regulation.

Rosfinmonitoring called the ABR proposal worthy of attention, while deputy head of the working group Andrey Lugovoy said that the proposed approach would only hinder the market’s legalisation.

Earlier, Russia’s Investigative Committee head Alexander Bastrykin proposed to legally define the procedure for confiscating cryptocurrencies and urged the introduction of mandatory identification of their owners.

The Prosecutor General’s Office said it is preparing norms that would allow to treat digital assets as instruments of crime and confiscate them.

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