The Russia Investigative Committee has proposed amendments that could restructure Bitcoin and cryptocurrency trading within the country.
According to an Interfax report, ICR Chairman Alexander Bastrykin announced plans at a February board meeting to classify Bitcoin and other cryptocurrencies as property.
If approved, the changes would legally enable the confiscation of crypto in criminal cases and impose criminal liability for transferring electronic payment instruments to third parties.
Addressing the “Dropper” Problem
It is worth noting that, at the moment, Russian law has no clear rules for handling cryptocurrency in criminal cases.
However, the new amendments would change this by treating crypto as property. Put differently, this would allow authorities to seize and freeze digital assets when needed.
Furthermore, one of the key concerns of the investigative committee is the use of third-party bank accounts—commonly referred to as “droppers”—to trade and use cryptocurrency.
Conversely, Russian authorities are confident that criminalizing this practice will help reduce digital financial crimes.
This decision will be a breath of fresh air for the committee because, under the country’s existing laws, electronic payment instruments include banking cards and digital wallets. However, tracking illicit crypto transactions remains challenging for law enforcement, making it difficult to curb digital financial crimes.
In addition, in a public comment, Legal expert Vladimir Sobinsky from the law firm DRC explained that many Russian crypto buyers rely on peer-to-peer services through centralized exchanges. Due to local restrictions on direct crypto purchases, they often “buy access” to someone else’s banking app, which could be considered using a dropper’s services.
Therefore, the committee’s proposal intends to criminalize this practice, as droppers—often “young individuals” or “migrants”—sell access to their bank accounts for 50,000-60,000 Russian rubles ($500-$600).
Rising Digital Crime and Legal Uncertainty
According to the Investigative Committee, digital crimes in Russia increased by 10% in 2024 compared to the previous year, with nearly 20% involving minors. However, the exact number of Bitcoin and crypto-related offenses remains unclear.
Legal experts remain divided on whether the proposed criminal liability applies to crypto wallets. For example, Sobinsky argues that crypto wallets do not qualify as electronic payment instruments. At the same time, Nevsky IP Law, another Russian firm, asserts that digital and hardware wallets should be included.
Nevsky IP Law partner Ruslan Gafurov pointed out that while banks prohibit the transfer of bank cards, no criminal bans currently exist. He emphasized that the legal classification of crypto as property is already established in civil and tax matters.
“Russian courts have previously confirmed that cryptocurrency falls under property laws, especially in cases involving bankruptcy and divorce,” Gafurov stated.
Russia and Implications for Bitcoin Confiscation
While crypto is already recognized as property under Russian law, the proposed amendments could streamline its treatment in criminal cases. The present key concern is how authorities can track, freeze, and recover stolen or illicitly obtained cryptocurrencies.
Sobinsky stressed that the primary goal should be improving crime detection and asset recovery in the crypto space.
“If cryptocurrency is tracked down, found in a custodial wallet, and its movement is stopped, the question arises of how to recover it. Developing regulations in this area is critical to increasing solved cases,” he noted.
Last week, Russia’s Ministry of Energy announced plans to introduce a nationwide registry for mining equipment. This will further tighten its grip on the crypto-mining sector.
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