Russian authorities are looking for legal means to confiscate virtual assets such as cryptocurrencies as they already can with more traditional forms of ownership.
In an effort to combat cybercrime, the Ministry of the Interior intends to develop legislation allowing forensic services to compel criminals to deliver ill-gotten digital gains and wish to that proposals be published by December 2021, according to a report released Thursday by the Russian press source RBC.
The financial regulator Rosfinmonitoring, the Prosecutor General's Office, the Investigation Committee, the Ministry of Justice, the Federal Customs Service, the Federal Security Service and the Supreme Court will join the Ministry of the Interior to develop the proposals.
Long awaited regulation of crypto assets more generally has been blocked by the Russian parliament, further complicating the situation. According to the report, a legal definition of cryptos, perhaps as goods or cash equivalents, is necessary to allow for confiscation. However, the definition in the new rules may not be appropriate in this case.
There are also other potential problems for the plan. Regulators are aware of the difficulty of confiscating crypto residing in different types of portfolios protected by both encryption and passwords of users, RBC sources said.
Nevertheless, the authorities believe that they might be able to work with stock exchanges to isolate and freeze funds, said Nikita Kulikov, member of the State Duma's expert council and founder of the self-governing organization non-profit PravoRobotov.
In addition, agencies may need to develop their own cryptographic portfolios and find ways to exchange their digital assets in fiat. "For these purposes, they can create a state crypto-exchange and a crypto-ruble with a stable rate in which they will store the withdrawn funds," Kulikov said.
While the police are seeking to become familiar with cryptocurrency, the Russian central bank remains indifferent. The President of the Bank of Russia, Elvira Nabiullina, said in October that she did not see any pressing reason to launch a digital ruble as a result of internal research.
Russian Rubles and BTC Image via Shutterstock