Russian Prosecutor: Government Agencies Need Access to Crypto Wallets and Exchanges

Prosecutors have warned that Russian authorities are having difficulty cashing out digital assets they have obtained. They have also pushed the government to recognize cryptocurrencies as property, allow departments to utilize digital wallets, and allow them to use crypto exchanges.

According to the business daily Kommersant, Russian prosecutors are convinced that investigative agencies, among other government bodies, should be allowed to set up crypto wallets and store and convert confiscated digital currency to fiat money.

Prosecutor Madina Dolgieva of the Office’s Main Judicial Department told participants in an e-justice round table discussion that the Prosecutor General’s Office has consistently campaigned for recognizing digital assets as property that may be taken if acquired criminally.

During the discussion, which was convened by the Federation Council’s Committee on Constitutional Legislation and State Building, Dolgieva stated that courts are still making contradictory judgements – some accept crypto as property, while others do not.

In Russia, cryptocurrencies are still not fully regulated, with the current law “On Digital Financial Assets,” which come into effect in 2021, only answering a limited set of problems. A measure introducing modifications is now being debated in Russia’s State Duma, the lower house of parliament.

Confiscating a physical wallet with virtual assets, for example, is only half the job because the cryptocurrency must still be cashed out, according to Madina Dolgieva. And that’s where the troubles start, she says, because local exchanges have yet to be regulated, and the prosecutor’s office cannot use overseas platforms.

The prosecutor believes it is necessary to allow investigating authorities to open their own wallets and convert cryptocurrency, the circulation of which has increased significantly in the Russian Federation since the government imposed restrictions on foreign currency transfers in February of this year.

The proposal comes despite the Central Bank of Russia‘s opposition to legalizing cryptocurrency transactions in the country. The monetary authority backed the draft bill submitted to the Duma on the condition that even mining rewards be transferred outside of Russia or only under special ‘experimental legal regimes’ within Russia.

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