Russian Ministry of Internal Affairs is developing a legal mechanism for the arrest of crypto assets

The Ministry of the Interior of the Russian Federation, together with other departments, is preparing a proposal to create a legal mechanism to seize virtual assets in order to confiscate them.

A source familiar with the situation told the RBC information portal that the Ministry of Internal Affairs would work in this direction with the support of the Financial Monitoring, the Prosecutor General’s Office, the FSB, the Federal Customs Service, the Federal Security Service and the Supreme Court. The proposal must be prepared before 2021.

Member of the expert council of the State Duma and founder of the ANO “PravoRobotov” Nikita Kulikov noted that this is primarily about cryptocurrencies. The standard procedure for the seizure of property should be applied to them, and the current wording in the bill on digital financial assets is not suitable for solving this problem.

“The number of crimes using virtual assets is growing steadily, which makes it necessary to develop mechanisms for legal regulation and control over their turnover,” comments Alena Zelenovskaya, head of the criminal and administrative law practice at NSA Amuleks.

According to experts, the authorities for the seizure of cryptocurrencies for the purpose of confiscation will be received by employees of the UK and the FSB, as well as police investigators. The procedure for their seizure will be possible only after an appropriate court decision.

The most interesting mechanism that will be used to seize cryptocurrencies in case the owner refuses to provide private keys, for example, under the pretext of losing them. Cryptocurrency exchanges are also not an option, since the most popular operate outside the Russian jurisdiction, and even if law enforcement officers find crypto assets on centralized sites, they can ignore the request. In this regard, it is necessary to work out a scenario of actions in the event that the above situation arises.

It is worth paying attention to the fact that at the moment cryptocurrencies in Russia are in the gray zone, and accordingly, for confiscation, you must first recognize them at the legislative level.