Russian Government to Add Cryptocurrency Terms to Criminal Code

A bill drafted by the Ministry of Justice will soon reach the State Duma, enabling authorities to seize digital assets during investigations. The Justice Ministry's draft legislation has already received approval from the Government Commission on Legislative Activity, and according to two sources close to the commission cited by Russian newspaper Vedomosti, the proposal will be forwarded to the Duma soon. Currently, cryptocurrency-related terms are not defined in either the Criminal Code or the Criminal Procedure Code, which police and prosecutors claim greatly complicates investigations involving cryptocurrencies.

While a 2020 law allows courts to recognise cryptocurrency as intangible property in bankruptcy cases, and lawmakers have amended laws for courts dealing with counter-terrorism and corruption cases, cryptocurrency has no legal status whatsoever in general criminal cases. Vladimir Gruzdev, Chairman of the Board at the Association of Lawyers of Russia, explained that the current cryptocurrency confiscation process is extremely complicated and only possible with the help of a specialist who can guarantee the correct handling of such a specific type of property. Though physical hardware wallets can be seized, confiscating cryptocurrencies held in online "hot" wallets requires "transferring coins to a special address-identifier to ensure its safety," further complicating matters for authorities.

The bill aims to officially recognise cryptoassets as items subject to confiscation and establish clear procedures for these actions. However, some legal experts like Maria Bakakina, an adviser to the criminal law practice at Sokolov, Trusov, and Partners, have raised questions about what legal mechanism courts have previously used to seize cryptocurrency. Daniil Markhiyev, managing partner at Daniil Markhiyev and Partners, warned that lawmakers and government ministries must verify the "technical readiness" of Russian law enforcement agencies before approving the bill and emphasised that "guarantees are needed to protect the rights of law-abiding individuals" in crypto cases. Earlier this month, Dmitry Aristov, the head of the Russian Federal Bailiff Service, announced that his agency had developed new methods to convert Bitcoin seized in criminal cases into cash for the Treasury.

Sources:

1.

Russia plans to add cryptocurrency terms to the criminal code | Digital Watch Observatory

Legal experts suggest that Russia’s proposed crypto law will clarify the seizure process but raise questions about protecting citizens’ rights.

Digital Watch Observatorynikoletasdiplomacy.edu

2.

Russia Adds Crypto to Criminal Code | Cryptowisser News

Russia’s Ministry of Justice has drafted legislation to add cryptocurrency terminology to the criminal code, enabling law enforcement to legally seize digital assets during investigations.

CryptowisserNikolas Sargeant

3.

Russian Government to Add Crypto-Related Clauses to Criminal Code
The Russian government plans to amend its criminal code to officially define “cryptocurrency” and related terms, making it easier for law enforcement to seize digital assets during investigations. :contentReference[oaicite:1]{index=1}