Russia to Bring More Legislation to Crypto — New Bill Allows Crypto Confiscation

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Russian Government Orders Officials to Declare Crypto Holdings
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Russian officials aim to develop a new set of amendments that would authorize the government to confiscate crypto assets, as per a report by a local media outlet. Igor Krasnov, the Prosecutor General of Russia, asserted that the new bill would essentially target the cryptocurrencies used in illegal activities.

Krasnov, who was speaking at a conference yesterday, July 7, asserted that crypto assets have been increasingly associated with illicit activities. He claimed that major cryptocurrencies like Bitcoin have been used for crimes like bribery, laundering stolen funds, and other prohibited actions.

While declaring that the latest moves by the Russian government to regulate cryptocurrencies have been quite resultful, Krasnov stated that crypto is still a challenge for the country. “The criminal usage of cryptocurrencies poses a serious challenge in our country,” he said.

Krasnov also emphasized that a broader regulatory framework is required for bringing extra protection. “This would allow the application of restrictive measures and confiscation of virtual assets,” he stated. 

However, the problem with almost all cryptocurrencies is that they are not seizable. For instance, in the case of Bitcoin, one can only access it if they have private keys. Other than that, there is no way to reach Bitcoins inside a wallet.

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Nevertheless, a Russian senior lawyer Nikita Soshnikov, noted that the officials have already managed to seize 0.1 and 4.70235 Bitcoin from FSB officers who were imprisoned for receiving bribes. Reportedly, the officials confiscated Bitcoins as state revenue.

Does Russia Consider Cryptocurrencies Rival to its CBDC

Earlier this year, The news came out that Russia aims to release a digital prototype for its CBDC (digital ruble) by the year-end. A couple of weeks later, Russia lifted the ban on crypto transactions and announced that crypto-assets can be utilized as a “contractual” means of payment. 

However, this was somehow paradoxical. Looking at China, it is crystal clear that the country perceives cryptocurrencies as a competitor to its CBDC. Therefore, it launched a vigorous crackdown to remove this potential rival. 

Indeed, cryptocurrencies are rivals to CBDCs — though a kind of rival that beats CBDCs hands down. China knows this, and arguably, Russia has started understanding it.

Last week, the central bank of Russia launched a trial for its CBDC with twelve of the biggest Russian banks. This can be an indication that China is persistent in meeting its year-end deadline for its CBDC. However, if the country commences increasing hostility towards cryptocurrencies, then it can be argued that Russia also wants to eliminate its CBDC rivals.