Russia set to enforce new rules for seizing digital currency

Russia set to enforce new rules for seizing digital currency

Russia is preparing a new set of rules that would define when law enforcement authorities in the country can confiscate digital currencies, in a move designed to shore up the powers of regulators there.

According to reports in Russian news agency TASS, prosecutors are preparing to enforce powers which could see them taking control of digital currency found to have been obtained illegally or in connection with crime, in a bid to stem the rising tide of ill-gotten digital currency gains in the country.

At a conference held in St. Petersburg, Prosecutor General Igor Krasnov said the use of digital currency by criminal elements in Russia was a significant issue for law enforcement, and that the authorities required more powers for dealing with those who were using digital currency illegally.

Russia passed its first legislation regulating digital assets last year. Now, the new measures are expected to see overhauls to both the criminal and penal codes in the country, which will give law enforcement the powers to “apply restrictive measures and confiscation to the virtual assets.”

According to Krasnov, a particular problem has emerged around the alleged use of digital currencies for bribes, which is harder to detect than more traditional means of corruption via fiat currency. It comes as a spokesperson for Rosfinmonitoring, Russia’s financial surveillance authority, suggested there were plans to trace digital currency cash-outs, and to introduce a new classification for code for suspicious digital currency transactions.

Digital currency has also been seen as a tool for raising funds for political and civil activists in Russia, with the crackdown also likely to affect how they use digital currencies to raise funds.

The rules will give the regulator greater powers for tackling digital currencies in the country, at a time of increasing pressure from regulators across the world intent on introducing stronger regulation to the sector.

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