Russia Approves Bitcoin Seizure for State Benefit
Russian authorities have agreed to implement a mechanism for the seizure of cryptocurrency in criminal cases, according to RBC, citing its own sources.
Amendments to the Criminal and Criminal Procedure Codes, recognizing digital assets as property, have been approved by the government commission on legislative activities.
The document outlines the procedures for investigators and establishes conditions for the seizure of cryptocurrencies.
The amendments clarify how investigators can seize cryptocurrency. Depending on the storage method, assets are either transferred to specialized addresses or devices storing wallets or access codes are confiscated. This measure aims to preserve funds and block transactions until the criminal case is concluded.
However, experts highlight implementation challenges. For instance, owners may refuse to provide access to wallets or hide storage devices, and law enforcement may face difficulties working with international crypto platforms, which do not always cooperate with Russian authorities. Moreover, there is no established mechanism for selling confiscated digital assets for state revenue.
If the amendments are adopted, cryptocurrency could be used in the qualification of crimes such as theft, fraud, or corruption. Asset seizures would allow for their blocking, and in the event of a guilty verdict, the funds could be confiscated for the benefit of the state.
Lawyers added that while blockchain allows for transaction tracking, the lack of technical access to keys or passwords could be an obstacle. Overcoming these challenges will require specialist involvement or international cooperation.
Grigory Osipov, Director of Investigations at “Shard,” confirmed to ForkLog that the mechanism for cryptocurrency seizure reflects an attempt by Russian authorities to adapt to the realities of the digital economy.
He noted that in practice, implementing these measures may face significant technical and legal challenges. For example, if a wallet owner does not provide access to assets, law enforcement, even with specialist involvement, is unlikely to gain direct access to funds due to the nature of blockchain technology.
“Yes, there is a possibility that passwords are saved on a phone or used consistently across different applications, but if the owner follows digital hygiene rules, accessing the wallet will be difficult. The same applies to found access keys in the ‘pension’ folder: if the wallet owner exercises due diligence, such ‘evidence’ will not be left,” Osipov explained.
The lack of a developed mechanism for interaction with foreign crypto platforms, many of which are outside Russia’s legal jurisdiction, creates additional difficulties, the expert emphasized.
Osipov also noted that the absence of comprehensive legal regulation of digital currencies in the country leads to the possibility that the arrest and sale of confiscated assets may occur with a violation of the rights balance of market participants, increasing the risk of corruption or unlawful pressure on users.
In March, Alexander Bastrykin, Chairman of the Investigative Committee, announced that the law recognizing cryptocurrency as property is under consideration.
Later, Dmitry Aristov, head of the FSSP, stated that the agency is developing a mechanism for the confiscation of bitcoins for state revenue.
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