Russian Prosecutors to Gain Crypto Confiscation Powers – But There’s a Wrinkle

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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 06:55 EDT

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The Russian Prosecutor-General is set to let investigators confiscate crypto and liquidate criminals’ tokens, with the Treasury hoping to benefit.

But legal experts say the plan could hit a roadblock when prosecutors try to liquidate coins.

The media outlet Vedemosti first reported on the Prosecutor-General’s proposals back in April.

Madina Dolgieva, the judiciary director at the Prosecutor-General’s Office, stated that a change in rules would likely be possible “without legislative amendments.”

Amendments would require parliamentary approval.

And it appears the plan has progressed since April, Stavropol Plus reported this week.

A leading academic opined that confiscated crypto funds would likely be sent to the Treasury.

However, the expert said that converting tokens to fiat may prove problematic.

The media outlet carried quotes from Diana Bersey, an Associate Professor at the Stavropol branch of the Russian Presidential Academy of National Economy and Public Administration.

Bersey explained:

“Dolgieva believes that the relevant changes can be made ‘via a government decree.’ That means changes to the criminal code would not be required.”

But the academic added:

“[Dolgieva] also believes that it is necessary to amend laws on enforcement proceedings so that, after [crypto has been confiscated], the Federal Bailiff Service can sell the coins it has seized.”

Crypto still has no legal status in Russia.

But previous court rulings in civil and criminal cases have seen judges rule that coins have “property” status.

Experts claim that prosecutors could adopt a similar view to tokens.

And that means that they would be able to seize them as “assets.”

Dolgieva claimed that tweaks to the existing “confiscation mechanism” would allow “investigating authorities” to “open their own cryptocurrency accounts and wallets.”

She stated that they could use these wallets to hold coins while waiting for court approval to liquidate.

Russian Prosecutors to Be Given New Crypto Powers – What Else Is Moscow Planning?

Russian lawmakers say they are hopeful of legalizing the use of tokens in international trade.

They also want to legalize industrial crypto mining before the year is out.

But the crypto-skeptic Central Bank could yet provide more stumbling blocks.

Earlier this month, a security firm claimed that almost $300 million worth of crypto trades per day were being offered on Russia’s fast-growing P2P market.