Russian Government to Create Crypto Confiscation Platform

The Russian government is planning to build a platform that will allow the nation’s law enforcement agencies to seize and hold crypto they confiscate from criminals.

Per the newspaper Izvestia, the platform is the brainchild of the Russian Minister of Internal Affairs Vladimir Kolokoltsev.

Russian Government Seeks Way to ‘Store’ Confiscated Crypto

The newspaper wrote on March 18 that it had seen an official document that contained instructions for the Ministry of Finance.

The document reportedly informs the ministry that it must “look into” ways to create the new platform. The ministry must report on its efforts by October 1, 2024.

The document appears to have been created by the government’s Commission on Crime Prevention. Kolokoltsev is the chair of the commission.

The platform would potentially allow courts, prosecutors, and bailiffs to seize tokens within the “framework” of criminal proceedings.

The media outlet  did not reveal how it had obtained the document. It said it had learned the “instruction to the ministry” had been given “at the end of December last year.”

The commission allegedly issued the order after a meeting on “increasing the effectiveness of combating offenses using IT systems.”

Russian Gov’t Wants Powers to ‘Seize and Store’ Crypto

The authenticity of the document was confirmed by the Ministry of Internal Affairs. The same ministry told Izvestia that the Ministry of Finance had “initiated the proposal and agreed on a time frame for a response to the commission.”

The Ministry of Finance, however, did not respond to the newspaper’s request for comment. According to Izvestia, the text ordered the Ministry of Finance:

“Look into the issue of creating a digital currency platform localized on the territory of the Russian Federation and under the control of the state. This platform will be used for the seizure and storage [of cryptoassets] within the framework of criminal proceedings.”

Last year, the Ministry of Justice unveiled its own plans to let bailiffs seize not only crypto holdings, but also CBDC tokens.

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A Russian lawmaker last week berated Moscow for failing to regulate crypto. He claimed that “a large part” of the Russian “black and ‘gray’ markets use cryptoassets.”

The Financial Action Task Force downgraded Russia’s compliance level in February due to Moscow’s “insufficient regulation of virtual assets and cryptocurrencies.”