Russia’s main Federal Investigation Authority is proposing a new law for bitcoin which may potentially criminalize its transfer through third party.
Russia’s investigative committee has made a proposal that can potentially affect the country’s cryptocurrency market. In early February, agency president Alexander Batrikin announced during an extended board meeting that the committee had legally proposed to recognize cryptocurrency as a property, Russian news outlet interfax Reports,
He also suggested criminal liability to move electronic payment devices to third party. Russian legal experts interviewed by Crypto.NWS divided on whether Cryptocurrency falls under the term. But one thing is clear: if approved, changes will determine the clear rules how cryptocurrency can be confiscated or seized during investigation.
Droplet
As a press time, the Russian law does not have a standardized method of how to handle cryptocurrency in criminal cases. However, this may soon change. The proposed amendment will officially classify Crypto as a property, allowing authorities to consider it as evidence. The new rules will also determine guidelines for cold and confiscation of cryptocurrency.
A major issue that the committee is addressing in its call is the illegal use of third-party bank accounts-often referred to as “droppers”-to facilitate the cryptocurrency transactions. This is the reason that officers suggest criminal obligations.
According to Russia’s law, electronic payments refer to methods that allow individuals to manage and transfer money through electronic systems, such as banking cards or digital wallets. But when it comes to cryptocurrency, law enforcement faces technical challenges in identifying and tracking illegal transactions.
Vladimir Sobinski, a legal expert at Law firm DRC, represented Benance in 2020, in a comment for Crypto said that the issue is how to bought a crypto in Russia. They say that many Crypto Newbies rely on cords of centralized crypto exchanges on colleagues.
There, they essentially “buy access” for someone else’s banking apps as Russian banking rules limit their ability to buy crypto directly. This mechanism is technically counted as using a dropper services, explaining Sobinski.
“In most cases, this is due to the fact that when often buying crypto or buying transactions, users’ bank cards are blocked under federal law 115-FL, and forced them to close their accounts goes. As a result, a person who often buys and sells cryptocurrency is forced to ‘buy access’ to a third party banking app to transact through his account, one for his own objectives Dropper services are effectively used. ,
Vladimir sobinski
Basricin’s proposal criminalizes this practice in an attempt to stop the increasing number of crimes related to cryptocurrency, especially those who include young persons. Sobinski says Droppers are often “young people or migrant” who are ready to “sell access” to their bank account for 50,000-60,000 Russian rubles (about $ 500-600).
According to data from Russia’s investigative committee, digital offenses increased by 10% in 2024 compared to the previous year, with one of the five crimes committed by persons under the majority of age. However, it is not clear how many involved crypto.
Valid implication
While the idea of criminal liability to move electronic payment devices is clear, whether it applies to crypto wallets. Sobinski says that crypto wallets are not considered an electronic payment tool. The Nevsky IP law, another Russian firm that also represents Benance in the court, believes that they are.
,[…] In terms of crypto, electronic payment devices include both digital and hardware wallets. Nominee parties understand the initiative to make the transfer of such electronic payment equipment criminal. Bank cards, law enforcement, regulatory officers, and banks themselves know who is doing the transaction. With cryptocurrency, however, the wallet is often known, but not a specific person. ,
Ruslan Gafurov, Partner, Nevsky IP law head of dispute resolution exercise
Gafurov also said that the incident of “droppers” is common in Russia’s banking card sector. Banks always include a section to issue cards for issuing cards, which restricts the transfer of the card, but “currently no criminal restrictions exist,” Gafurov says, saying that this issue is saying that this issue “Not as simple as it may look at first glance.”
Addressing Batricin’s call to classify Crypto as a property, Nevsky IP Law Partner says that it is already recognized as a property under Russian law, especially in civil and tax matters .
“The courts have first dealt with questions whether cryptocurrency is considered to be property in bankruptcy and divorce cases. This was when it was first confirmed in Russia that under the meaning of Article 128 of the Civil Code, Cryptocurrency is actually considered a property. ,
Ruslan Gafurov
However, Gafurov admitted that the criminal law may require amendment to address specific procentive issues related to cryptocurrency. For example, these amendments can give light on the seizure and seizure of cryptocurrency. He said that this issue is not about recognizing cryptocurrency as a property, but how it is treated in criminal investigation.
Sobinski says that Russian law enforcement is still facing many challenges, tracking the stolen crypto to returning it to the victims.
“If cryptocurrency is tracked, a custodial wallet is found, and its movement is stopped, the question arises how to fix it. Development of rules in this region is very important and should mainly focus on increasing the number of crimes solved in the region. ,
Vladimir sobinski
Both law firms agree that the property is not new, recognizing Crypto, the proposed changes will bring more clarity to criminal investigation. They feel that laws should also address practical issues, such as how crypto can be seized as evidence in criminal cases, frozen or used.
