Russia Outlines Plan to Confiscate Cryptocurrency Linked with Criminal Activities

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Until this point, the Russian government has stalled on the enforcement of regulations for its cryptocurrency industry. However, in the wake of rampant crypto-enabled criminal activities in the country, it would seem that authorities are finally seeing the need to step in.

Earlier today, local business news medium RBC reported that several government agencies have been tasked with developing and enforcing procedures for seizing digital assets that have been linked with crime.

As the report notes, the Russian government is working on developing a legal means of seizing virtual assets, and it has called on agencies such as the Ministry of Internal Affairs, the Prosecutor General’s Office, the Justice Ministry, among others. With the participation of the Russian Supreme Court, all of these agencies are expected to develop a mechanism of seizing these assets by Dec 31, 2021.

Cryptocurrency Crimes Hitting Close to Home

RBC claims that the government was forced to take this step due to the increasing number of crypto-assisted crimes, which has led to many being skeptical about the feasibility of digital currencies and is causing a bit of a panic among citizens.

As BeInCrypto previously reported, police in St. Petersburg were said to have received an anonymous letter threatening to blow up several railway stations across the country if demands of 50 BTC (worth about $460,000 at press time) weren’t met. While there is a possibility of this being a farce, police have been on high alert since, checking and surveilling railways regularly.

Last month, Denis Baykov, a worker at a nuclear warhead facility in the western town of Sarov was fined $7,000 after he and two accomplices were found trying to mine Bitcoin with the use of the facility’s supercomputer. The plant was registered as a state secret, and the men were accused of having exposed its security by connecting the computer to the Internet.

Given all of these criminal occurrences, the Kremlin is hoping to be able to regulate and control the spread of crimes easily. However, as the RBC reported, there are some technical difficulties with getting this done as well.

Confiscation Won’t Be Easy

Speaking to the news medium, Konstantin Golikov, co-owner and chief executive of the business and community platform DailyRich, explained that for these confiscations to work, the Russian legal system will need to recognize crypto-assets as either commodities or an equivalent to cash. He added, “If law enforcement agencies begin to discuss the forfeiture of cryptocurrency, then, in fact, they are launching a mechanism for legalizing cryptocurrency on the territory of Russia. But, in my opinion, the Bank of Russia will seriously resist this.”

Then, there is the issue of getting their hands on the assets themselves. Cryptocurrencies are usually held in wallets, and without private keys, government agencies won’t theoretically be able to seize them.

For more information on this story and other important developments in the Russian cryptocurrency space, check out BeInCrypto’s Russian domain here!

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Based in the UK, Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system. He's an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting, and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He has a strong passion for regulation and macroeconomic trends as it allows him to peek under the global bonnet to see how the world works. Follow him on Twitter: @adejimi

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