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Russian authorities are having trouble cashing out digital assets they have acquired, prosecutors have warned. They also called on the government to recognize cryptocurrency as property, allow agencies to own digital wallets and use crypto exchanges.

Prosecutors claim Russian investigators must have cryptocurrency wallets

Russian prosecutors are convinced that investigative bodies, among other state bodies, should be allowed to create crypto wallets and be able to store and convert seized digital coins into fiat money, Kommersant business daily reports.

The Attorney General’s Office has consistently advocated for recognizing digital assets as property that can be seized if obtained criminally, Madina Dolgieva, prosecutor of the Office’s General Judicial Department, told participants in a roundtable discussion on e-justice.

During the meeting, which was organized by the Committee on Constitutional Legislation and State-Building of the Federal Council, the upper house of parliament, Dolgieva noted that courts are still making conflicting decisions, with some recognizing crypto as property and others not.

Cryptocurrencies have yet to be comprehensively regulated in Russia, with the current Digital Financial Assets Law, which came into effect in 2021, answering limited questions. The amending bill is currently being debated in the State Duma, the lower house of Russia’s legislature.

For example, confiscating a physical wallet with virtual assets is only half the battle, as crypto still needs to be cashed out, Madina Dolgieva explained. And this is where the problems begin, he emphasized, because internal exchanges still need to be licensed, while the prosecutor’s office cannot use foreign platforms.

The prosecutor considers it necessary to allow the investigating authorities to open their own wallet and convert the cryptocurrency, the circulation of which has increased significantly in the Russian Federation since the government introduced restrictions on transfers abroad in February of this year.

The proposal comes as Russia’s Central Bank opposes the legalization of crypto transactions in the country. The monetary authority backed the draft law submitted to the Duma, with the condition that even mining rewards would be exchanged outside the country or exclusively within Russia under special “experimental legal regimes”.

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seizure, courts, crypto, crypto assets, crypto exchanges, crypto wallets, cryptocurrencies, cryptocurrency, digital assets, investigations, investigators, property, prosecutor’s office, prosecutor’s office, prosecutor’s office, regulation, regulation, Russia, russian, seizure

Do you think the Russian government will allow investigators and prosecutors to open crypto wallets and use digital asset exchanges? Share your thoughts on the topic in the comments section below.

Lubomir Tasev

Lubomir Tasev is a tech-savvy Eastern European journalist who likes the Hitchens quote. “Being a writer is what I am, not what I do.” Apart from crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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