Russia Seeks to Seize Cryptocurrencies as Property in Criminal Cases

Russia’s Ministry of Justice has drafted a bill that would formally treat digital currencies, like Bitcoin, as property that can be seized and confiscated in criminal investigations. This announcement was made by Vadim Fedorov, Russian Deputy Minister of Justice, during a legal forum focused on the challenges posed by new technologies.

The bill, which would allow law enforcement to seize physical devices, such as hardware wallets or storage drives, that contain access to digital currencies. It would also enable investigators to request court orders to block crypto transactions. Fedorov explained that the bill proposes special requirements to ensure the security of such assets, allowing investigators to seize physical devices containing access codes or request a court-imposed ban on transactions, depending on the specific characteristics of the digital currency.

This proposed legislation is part of the Russian government’s effort to modernize its criminal justice tools in response to the growing role of digital assets in financial crime. Fedorov emphasized that authorities aim to close legal loopholes that currently make it difficult for law enforcement to deal with crypto assets involved in crime. The bill also calls for the involvement of specialists who can determine how best to secure digital assets while ensuring they remain intact for future confiscation or victim compensation.

This legislative move is part of a broader effort to regulate digital currencies within the country, aiming to provide a clear legal framework for their treatment and management. The bill, if passed, would allow authorities to seize cryptocurrencies as part of legal proceedings, similar to how traditional property can be confiscated. This development comes as Russia continues to grapple with the complexities of digital currencies, seeking to balance innovation with regulatory oversight.

The draft bill is significant as it marks a shift in Russia's approach to cryptocurrencies. Previously, the country had taken a cautious stance, with provisions defining the rules for the mining and circulation of digital currencies taking effect in early 2025. The new legislation aims to address the legal ambiguities surrounding cryptocurrencies, providing a more structured environment for their use and seizure. This move is expected to enhance the government's ability to enforce laws related to digital currencies, potentially reducing illicit activities and ensuring compliance with existing regulations.

The classification of cryptocurrencies as property for seizure aligns with global trends where governments are increasingly recognizing the need for clear legal frameworks to manage digital assets. By treating cryptocurrencies as property, Russia can apply existing legal principles to digital currencies, making it easier to enforce laws and protect the interests of both individuals and the state. This approach also reflects a growing recognition of the potential risks associated with cryptocurrencies, including their use in money laundering and other criminal activities.

The draft bill is part of a broader regulatory landscape in Russia, where the government has been actively working to integrate digital currencies into the financial system. The provisions defining the rules for the mining and circulation of digital currencies, which took effect in early 2025, are a testament to the country's efforts to create a comprehensive regulatory framework. This framework is designed to foster innovation while ensuring that digital currencies are used responsibly and in compliance with the law.

The classification of cryptocurrencies as property for seizure is a significant step forward in Russia's regulatory efforts. It provides a clear legal basis for the seizure of digital assets, making it easier for authorities to enforce laws and protect the interests of the state. This move is expected to have a positive impact on the digital currency landscape in Russia, providing a more structured environment for their use and management. As the country continues to develop its regulatory framework, it is likely to see increased adoption and integration of digital currencies into the financial system.