Russia developing a mechanism for seizure of crypto by 2021

by in Cryptocurrency News

Russia crypto law

The board of the Ministry of Internal Affairs of the Russian Federation instructed law enforcement agencies to develop a legal mechanism for the seizure of virtual assets for confiscation by December 31, 2021. This is reported by RBC with reference to an unnamed source.

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Rosfinmonitoring, the Prosecutor General’s Office, the Investigative Committee, the Ministry of Justice, the FSB, the Federal Customs Service and the Federal Security Service with the participation of the Supreme Court will take part in the preparation of the rules.

According to experts, the cryptocurrencies currently located in the gray zone for the Russian Federation are understood as virtual assets in this order.

“The usual practice of seizing property should be applied to them,” said Nikita Kulikov, member of the State Duma’s expert council, founder of PravoRobotov ANO.

At the same time, Kulikov adds, the wording that exists in the bill on digital financial assets is not suitable for these purposes.

According to the logic of the current legislation, the seizure of virtual assets for confiscation will be possible by court decision by officers of the IC, police investigators or FSB officers.

However, even at this stage, government agencies may have difficulty accessing a cryptocurrency wallet and proving that this wallet belongs to a specific person, experts say.

For the arrest of cryptocurrency stored on the exchange, law enforcement officers theoretically can write an official request to the site’s management with a request to block the funds of a particular client.

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“But in fact, only a platform that recognizes the powers of the Russian law enforcement agencies will fulfill these requirements,” Nikita Kulikov warns.

Also, in order to transfer virtual assets to the state account, government agencies must have their official crypto accounts. And due to the high volatility of the cryptocurrency, it will be necessary to work out a mechanism for its transfer to fiat or stablecoins.