Country Focus

Russian Ministry of Internal Affairs confirms it will seize crypto

Criminals in Russia will no longer be able to hide their assets through cryptocurrency, as several government agencies push plans to legalise the confiscation of digital assets

The Russian Ministry of Internal Affairs (MIA) has confirmed it is pushing ahead with new legal frameworks to allow the seizure of cryptocurrency assets.

Following rumours in November that Russian authorities were drafting plans to allow law enforcement agencies to confiscate digital assets, several government ministries have now formalised their strategy to seize crypto.

According to local news outlet TASS, Russian authorities have now confirmed that digital assets may no longer be safe from seizure by authorities, citing crypto’s growing role in Russian cybercrime cases.

The MIA has indicated that it will work together with other authorities to enforce digital asset seizure orders from the Russian Supreme Court, which will be actively handed out by the end of 2021.

It’s unclear whether the new proposals will only apply to cryptocurrencies and digital assets which have been gained through criminal or fraudulent activity, or if the new laws will also provide a back door for officials to seize any crypto assets they see fit.

The news comes amid growing confusion around Russia’s stance on crypto assets. Since crypto’s rise in popularity, the country has been largely non-committal, and has consistently failed to provide a clear legal framework for digital assets.

Crypto skepticism

Russian authorities have consistently shown skepticism towards cryptocurrencies. Last August, Coin Rivet reported that Russian ministers were looking to completely outlaw ICOs and cryptocurrencies in an effort to keep cash as king.

Several Russian banks have voiced their concern about the proliferation of crypto assets, with VTB Bank chief Andrey Kostin calling Bitcoin “fake money” with no future.

Similarly, cryptocurrency mining in Russia exists in particularly shaky legal territory, with the Russian government threatening several times to ban mining operations completely and miners facing fines if they exceed energy consumption limits.

There is currently no indication as to where confiscated crypto assets would be stored, nor whether they would eventually be auctioned off or sold with the proceeds reverting to the Russian government.