Russian Prosecutor General Prepares Legal Framework for Seizure and Confiscation of Cryptocurrency

The Russian Prosecutor General’s Office is working on laws to regulate the circulation of cryptocurrencies, according to the head of the department, Igor Krasnov. “We have developed amendments to a number of regulatory legal acts so that cryptocurrencies in illegal circulation are not only recognized as the subject of a crime, but also so there is a legal possibility for their seizure and confiscation,” he stated.

Krasnov did not specify exactly what changes have been developed. According to experts, there are several possible methods. These could include freezing funds on regulated crypto exchanges, transferring cryptocurrency to accounts of government financial institutions, or seizing wallet passwords by court order.

The Prosecutor General noted that, in criminal cases, courts generally recognize digital currencies as property, meaning they can be considered as bribes. However, this is not enough to establish a unified and consistent legal practice. “Introducing the concept of cryptocurrencies and other virtual assets into the criminal law sphere by enshrining the relevant norms in legislation should help with this,” he said.

It is worth recalling that in November, the Russian Prosecutor General’s Office prepared a bill to recognize cryptocurrencies and other virtual assets as property for the purposes of the Criminal Code.

The law “On Digital Financial Assets” came into force in January of this year. The document defines cryptocurrency but prohibits its use in Russia for payment of goods and services. In November, the Central Bank proposed introducing liability for the illegal circulation of digital financial assets and establishing rules for their taxation. The Ministry of Finance has suggested punishing owners of digital currencies with up to three years in prison for violations of tax legislation.

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