Russia Drafting Law on Confiscation of Crypto Assets

crypto assets

Russia Getting Tougher on Crypto Criminality

New Legislation Coming

Russian Federation Prosecutor General Igor Krasnov said his country is drawing up legislation that will enable law enforcement to confiscate crypto assets if their sources come from illegal activities or terrorism. The statement was made July 7 during a conference in St. Petersburg of the heads of prosecutor’s offices of European states. This is according to TASS, Russia’s largest news agency.

Krasnov said there are increasing reports of cryptocurrencies being used for bribes and for laundering stolen budget funds and that such transactions are harder to trace than bribes made with fiat money. He said the criminal use of cryptocurrencies in Russia has become a serious challenge and the new legislation “will allow the application of restrictive measures and confiscation in relation to virtual assets.”

Crypto assets Already Highly Restricted

Crypto assets are already very strictly limited in Russia. Residents are allowed to mine, trade, and own digital currencies, but they are not considered legal tender and people cannot use them to purchase domestic goods or services. The restrictive rules are due to an excess of criminal activities surrounding cryptocurrencies. This is why they are really starting to crack down. In fact, the Central Bank in Russia issued a warning as far back as September of 2017 that criminal acts such as money laundering and efforts to support terrorism could be associated with crypto.

Previous Legislation

The legislative amendments to be developed follow on the heels of the Digital Financial Assets and Digital Currency law signed by Russia’s President Vladimir Putin, which went into effect in January of this year. The law creates a definition for digital currencies and, among other things, prohibits Russian officials who work in national defense and security from owning digital financial assets.

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