According to local media, Russian authorities want to be able to seize cryptocurrencies in case of illegal activities.
“Russia intends to develop a legal mechanism for the confiscation of virtual assets for their confiscation”,
it is shown in a translated report of the RBC.
“The relevant proposals should be prepared by December 31, 2021 by the Ministry of Internal Affairs, together with the federal branch of financial monitoring Rosfinmonitoring, the General Prosecutor’s Office, the Investigation Committee, the Ministry of Justice … The Federal Customs Service and the Federal Security Service with the participation of the Supreme Court. “
Hard to implement
The cryptocurrency confiscation measure is very difficult to implement when it comes to Bitcoin or other global digital currencies. No details were given as to how the authorities could act in this regard.
Cryptocurrencies are generally kept on exchange platforms or in private wallets. These assets cannot be taken over by anyone without access to portfolios and, in most cases, only the owners (and probably the holders of assets) have access to them.
If the government wants to seize assets, the only way this can be done is with the co-operation of cryptocurrency holders. This effort should be preceded by greater regulatory clarity.
Progress in clarity on cryptocurrency regulation
In Russia some progress has been made regarding the clarity of cryptocurrency regulation this year. Currently, the Russian parliament is evaluating a package of laws regarding blockchain and cryptocurrency technology. Among them, the “digital rights law” defines smart contracts and digital tokens in the legal sense.
However, the laws have not yet been adopted, despite President Putin’s statements supporting innovative technologies.
Konstantin Golikov, CEO of digital rewards platform DailyRich, explained to RBC that the success of a government-led cryptocurrency seizure initiative would require clear regulations on how it classifies digital assets.
“If law enforcement agencies start discussing the seizure of cryptocurrencies, then, in fact, they are launching a mechanism for legalizing them on the territory of Russia,”
he said.
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