Russian Intelligence Service Wants More Power to Seize Crypto, Freeze Wallets

Cryptocurrency Legal Regulation Russia Wallet

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023 06:54 EDT

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Russia’s answer to the American FBI, the Investigative Committee of Russia, has called upon the government to grant it the power to seize crypto and freeze wallets.

In an interview with the media outlet Rossiyskaya Gazeta, the committee’s Chairman Alexander Bastrykin stated that the “decentralized nature of the issuance” of what he called “digital currencies” does not currently “allow for full state control in this area.”

Bastrykin claimed that in some special cases, law enforcers can use existing laws to seize and freeze coins much as they might do with bank accounts, funds, and securities.

But decentralization is a thorn in the side for agents and officers trying to do this, the Chairman noted. Often, officers are forced to seek the help of crypto firms in “special legal status” cases to transfer funds into state-owned wallets while legal procedures take place.

In the space of just nine months in 2021, the Investigative Committee says it dealt with 331 such “special legal status” cases.

But to be able to control cryptoassets more effectively in such cases, Bastrykin said officers needed the ability to “transfer” tokens from the control of the accused in a criminal case “to the control of the state.”

He said this could be done “by introducing changes to criminal law” that would allow a court to order a person to transfer cryptoassets “to a special state crypto account until the end of the trial.” Failure to comply would be a criminal offense, he suggested.

Across the border to the West, the head of the Ukrainian cyberpolice earlier this year called for the “legalization” of crypto – claiming that doing so would allow the police more room to manoeuvrer in their investigations.

The entire online “black market,” the cyberpolice chief claimed, now makes use of cryptoassets. As coins remain in a “grey” legal area in Ukraine (as is the case in Russia), officers complained that they found their hands were often tied in criminal procedures involving crypto transactions.
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– Russian Governor Who Slated Miners in October Now Plans to Welcome Them
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