Russia plans a legal mechanism for the seizure and confiscation of cryptocurrency fraud. The Ministry of Internal Affairs of Russia will work with various state organs to draw up the plans. That could enter into law in 2021.
07 November 2019, AtoZMarkets – The Ministry of Internal Affairs and other departments will develop a legal mechanism for the seizure and confiscation of virtual assets. However, difficulties can arise not only with technical execution, but also with the uncertain status of such assets in Russia. So, to confiscate cryptocurrency, it must first be recognized at the legislative level.
Russia Cryptocurrency Legal Mechanism
In Russia, a legal mechanism may appear for the seizure of virtual assets and their subsequent confiscation. The Ministry of Internal Affairs, the Federal Service, the Prosecutor General’s Office, the Investigative Committee, the Ministry of Justice, the FSB, the Federal Customs Service and the Federal Bailiff Service with the participation of the Supreme Court should prepare their proposals on this matter by December 31, 2021.
First of all, cryptocurrencies are virtual assets, explained Nikita Kulikov. He is a member of the State Duma’s expert council. And he is also the founder of the PravoRobotov Autonomous Non-Commercial Organization. He believes that the usual practice of seizing property should be applied to digital money. But cryptocurrencies are now in the gray zone in Russia. And for confiscation, they must first be recognized at the legislative level as either a product or a cash equivalent, added Konstantin Golikov. He is co-owner and CEO of the Dailyrich.ru platform. He also believes that law enforcement agencies are launching the process of legalizing cryptocurrencies in Russia. Nevertheless, the Central Bank will resist that. Furthermore, in October, Binance launches Russian Ruble based trading options.
The resolution of the contradiction could be international agreements in the field of control over the circulation and issue of cryptocurrencies, said Dmitry Gorbunov. The determination of the legal status of virtual assets and common standards for procedures related to their circulation should be developed at the international level. Alena Zelenovskaya agrees with that. He is head of the criminal and administrative law practice at NSAA Amuleks.
FSB Could Seize Cryptocurrencies
According to the court, investigators of internal affairs departments, employees of the Investigative Committee, or the FSB could seize cryptocurrencies, Zelenovskaya said. But it can be difficult for authorities to gain access to the wallets that store virtual assets. The owner can hide or forget the password, Gorbunov noted. He added that the investigation would also need to prove that the wallet belongs to a specific person. Authorities may require the wallet keeper to block it. But only those sites that recognize the powers of Russian law enforcement authorities will enforce the decision.
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