Authorities are preparing a law to confiscate bitcoins from Russians to fight corruption
Russian Prosecutor General Igor Krasnov has proposed adding amendments to Russian legislation to allow confiscation from citizens of their cryptocurrencies that "have become a source of income from crime." Krasnov believes that this would help in the fight against corruption.
Bitcoins are not allowed to Russians
Russian authorities are drafting amendments to a new law on cryptocurrencies that would allow the confiscation of bitcoins and other tokens from Russians who have become sources of income from crime. According to TASS, Russian Prosecutor General Igor Krasnov spoke about this state initiative.
According to him, virtual money has become frequently used in various corruption schemes, including bribery. "The latency of these criminal acts has recently been exacerbated by the use of crypto-assets as bribes, the commission of cryptocurrency exchange transactions as a way to launder stolen budget funds," Krasnov said.
The Attorney General of Russia did not specify a timeline for the preparation of amendments to the law on digital financial assets (DFA), their submission for consideration and entry into force. Who exactly is working on the amendments also remains unknown. The law itself was passed in July 2020 and went into effect on January 1, 2021.
A new threat looms over the cryptocurrencies of Russians
"A serious challenge is the criminal use of cryptocurrencies in our country. A significant step in overcoming this problem was the adoption of the federal law "On Digital Assets" in July 2020. Currently we are working on amendments to criminal and criminal procedural legislation," said the Attorney General. According to him, "it will allow the application of restrictive measures and confiscation in relation to virtual assets."
"It is obvious that the problem of criminal use of virtual assets, digital money, and other modern technologies, including artificial intelligence, will only increase in the near future. And it is all the more important to develop additional effective responses to these threats," summarized Igor Krasnov.
The precedent was set even before the amendments.
At the time of publication of this article and long before the adoption of the forthcoming amendments, at least one high-profile case of cryptocurrency confiscation was recorded in Russia. Indirectly, it is related to corruption in the Russian power structures.
In February 2021, CNews wrote that former employees of the Federal Security Service of Russia (FSB) Alexey Kolbov and Sergey Belousov were threatened with imprisonment. They extorted tens of millions of rubles in bitcoins from Erast Galumov, the former head of Izvestia Publishing House, threatening to "sew up" his case and put his son on an international wanted list
At the end of February 2021, according to Kommersant, the Second Western District Military Court sentenced both of the former enforcers to life imprisonment and stripped them of their ranks. Kolbov was no longer a reserve captain of justice and was sent to a strict regime colony for 12 years, while Belousov will spend nine years behind bars and will no longer be a reserve justice major. The prosecution demanded that they be sentenced to 13 and 10 years in prison, respectively.
But most importantly, the court ordered to confiscate 4.1 million bitcoins, received from Galumov. The fate of this money is unknown, as Galumov himself also went to prison. In November 2020, the businessman received six years in a general regime penal colony and a fine of 1 million rubles in a major fraud case.
The mechanism of confiscation will be developed by the Ministry of Internal Affairs
For almost two years Russia has been working out a mechanism of confiscation of virtual, but still money from Russians. As CNews reported, the Russian Ministry of Internal Affairs (MVD) has been working on it since November 2019.
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The Interior Ministry has a deadline within which it must prepare proposals to seize from citizens their money in the form of bitcoin, ether and other tokens. They must be ready no later than December 31, 2021.
The authorities became interested in crypto-assets of Russians only when bitcoin rate went up sharply
Thus, Igor Krasnov's words about the need to take cryptocurrencies from Russians in order to fight corruption came almost two years after the Ministry of Internal Affairs started working on this mechanism. At the time of publication, the deadline was a little less than six months away.
The Interior Ministry is not working alone on proposals to confiscate bitcoins. It is assisted by a whole group of government agencies, including the Prosecutor General's Office. Also preparation of proposals is carried out jointly with Rosinfomonitoring, the Investigative Committee (IC), the Ministry of Justice, the Federal Security Service, the Federal Customs Service (FCS) and the Federal Bailiff Service (FBS). Also, the Supreme Court takes part in the development of the proposals.
From court to prison
Russians owning cryptocurrencies may be threatened not only to lose their money, but even to go to jail for them. As reported by CNews, in November 2020. Ministry