Confiscation of Cryptocurrency in Russia: New Law in Effect

With the enforcement law being amended, the confiscation of cryptocurrency is now a reality in Russia. The changes, which came into force on September 1, 2023, alongside the country’s new digital currency legislation, have given bailiffs the authority to seize crypto assets from debtors through a digital depository, altering the legal landscape here.

Legal Changes Empower Bailiffs

Pro Blockchain Media Live has been covering the details of how these amendments work in practice. Under the new provisions for debt recovery, a court will make a ruling to that effect and the bailiff submits an order to the digital depository; the coins are then taken from the debtor and transferred to a government account.

First Cases and Digital Depository Mechanism

Dmitry Aristov of the FSSP told TASS that 13 cases of cryptocurrency confiscation are currently underway. It is a modest number for a system that has been in place for two months. It is not for the bailiff to decide what is to be confiscated; the courts have the final say and the bailiffs carry it out. Only those assets registered in the Russian digital depository are subject to seizure.

Controversies and Limitations

There is a case in progress where the authorities have attempted to seize crypto bought with income whose legality is in question, yet the court has decided to halt it for the time being, a sign of the caution being exercised and the legal complexities involved in the initial phase of enforcement. Such practical constraints as the requirement for the crypto to be in Russia’s depository may limit the impact of these changes, but as Pro Blockchain Media Live notes, they are nonetheless a significant change in the way digital assets are treated under Russian law.