Russian lawmakers prepare change in law to seize cryptocurrencies

Russian lawmakers are working on new laws that would allow the government to seize cryptocurrencies, according to a senior official.

Russia’s Prosecutor General Igor Krasnov announced that the government is currently working on a number of amendments to the country’s criminal code to allow authorities to seize cryptocurrencies from illegal activities, local news agency TASS reported.

At a conference of European prosecutors on Wednesday, Krasnov emphasized that cryptocurrencies such as Bitcoin (BTC) are increasingly being used for corruption and bribery. The official said cryptocurrencies are also a tool to launder embezzled budgets.

“The criminal use of cryptocurrencies is a serious challenge in our country,” said Krasnov. He stated that the passed Russian cryptocurrency law “On Digital Financial Assets” (DFA) played an important role in solving this problem, but the new amendments to the Criminal Code would provide additional protection. “This will allow the application of restrictive measures and the seizure of virtual assets,” said Krasnov.

According to some local industry experts, there are no laws that can help the government actually seize crypto assets. Nikita Soshnikov, a former senior lawyer at Deloitte CIS and director of Alfacash, told Cointelegraph: “It is clear that digital assets in wallets cannot be seized like any other asset class.” “However, there was one significant case where FSB staff were found guilty of taking bribes and the court officially confiscated 0.1 and 4.70235 BTC as government revenue,” he noted.

Soshnikov said Russia began developing cryptocurrency seizure proposals in 2019, years before the DFA law was passed. “The Attorney General’s Office remains the main actor in this project and in such a context the current statement is only a confirmation of the agreed plans,” he added.

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Krasnov was a former deputy chairman of the Russian Investigative Commission and became the country’s prosecutor general in early 2020. Since his appointment, Krasnov has been a big opponent of cryptocurrencies. Last year, he stated that cybercrime in Russia is often backed by cryptocurrencies and has increased 25 times since 2015.

Krasnow’s new efforts to fight crypto-induced corruption in Russia come months after US President Joe Biden’s government sanctioned him on charges against Russian anti-corruption and opposition leader Alexei Navalny.

According to local investigations, Krasnov himself has been embroiled in a number of controversies related to corruption.