The Russian government will rely on the cooperation of foreign-based trading platforms when it needs to confiscate crypto holdings as part of criminal proceedings. That’s according to a draft law that has been advancing in the Russian parliament and recently overcame another hurdle. The legislation regulates the seizure of digital assets by the Russian state. Russian law enforcement to treat cryptocurrency as property Authorities in Russia will soon be able to take control over cryptocurrency during criminal investigations under a new law, including by approaching exchanges registered in other jurisdictions for assistance. The bill, which aims to regulate the process, was adopted this week on second reading by the State Duma, the lower house of the Russian parliament. The document, which was submitted by the government in April, establishes a mechanism for the seizure and confiscation of digital coins involved in criminal cases. The text passed on Thursday supplements the Criminal Code and the Criminal Procedure Code of the Russian Federation with provisions recognizing cryptocurrency as property, the Interfax news agency reported. In an article, the prominent business daily Kommersant pointed out: “Law enforcement agencies will be able to officially consider digital currency as property and apply coercive measures against it.” The measures envisaged in the legislation, which is yet to be finalized and enforced, will effectively combat cybercrime and illegal crypto turnover in Russia, lawmakers claim. According to Mikhail Uspensky from the Association of Lawyers of Russia ( ALRF ), the amendments are long overdue, as Russian courts have already been treating digital currency as property , and criminal law is only catching up with the legal practice. The new provisions will mostly serve investigators and forensic experts who need clear instructions on how to proceed when they have to confiscate crypto. There have been a number of such cases in the country. This week, for example, two men were sentenced to eight years in prison for attacking a crypto blogger from Ryazan. They made him transfer to their wallets over 13 million rubles’ worth of his cryptocurrency (more than $160,000), which the authorities later managed to return to him, as reported by RBC. Cryptocurrency, as a subject of crime, is increasingly appearing in criminal cases, noted Dmitry Kirillov, head of digital legal practice at the Lidings law firm. The amendments to Russia’s criminal law were proposed in response to a fairly large number of criminal cases investigating crypto fraud, theft, or other abuses, he added, further commenting: “One way or another, it was necessary to confiscate cryptocurrency, for example, obtained through criminal means or related to corruption crimes.” New bill defines the methodology of crypto seizure There are two main ways to confiscate crypto, Kommersant noted – transferring the coins to another wallet, or in the case of a hardware wallet, taking control of the device itself. The law now provides for the assessment of the market value of the cryptocurrency in order to calculate financial damages and compensate victims. Law enforcement officials will have to fill out a protocol that specifies the type of cryptocurrency, its amount, and addresses, Interfax detailed. Cold storage wallets must be kept sealed as physical evidence, and the cryptocurrency in them may be sent to a different wallet for safekeeping. The exact procedures for transferring and storing digital assets will be determined through bylaws adopted by the Russian government after the law enters into force. That will require the final approval of the Russian parliament. Nevertheless, an amendment added to the bill between its two readings clarifies that sending the seized cryptocurrency to a safe address is permitted, if technically feasible. The draft law also allows Russian officials to seek cooperation from foreign cryptocurrency exchanges and other platforms working with digital assets, establishing the norms for such interactions. Commenting on the legislation earlier, Russia’s Deputy Justice Minister Elena Ardabyeva indicated that investigators will be free to request information about the market value of digital holdings and seize assets within the size of the damages inflicted by the defendants in a given case. The smartest crypto minds already read our newsletter. Want in? Join them .
