It would seem that Russia is now trying to impose more control over the burgeoning cryptocurrency sector. Specifically, a new report reveals that Russia is trying to make confiscating Bitcoin possible for the country’s police force.
Will Russian law enforcement be able to confiscate Bitcoin?
This fresh report comes from the Russian financial news outlet RBC. Moreover, the report goes on to state that the Russian Interior Ministry is currently hard at work coordinating various state organs to plan this upcoming law.
Furthermore, the report says that these regulations could enter into law as early as 2021. Although the report does not specifically mention Bitcoin, the meaning of it is clear. According to it, Russia seeks to gain greater control over the “digital asset” market.
The notion that Russian police needs to be able to confiscate cryptocurrencies comes following the sector’s intense growth. However, the mere idea that police should be able to confiscate cryptocurrencies go against the core principles for decentralized currencies.
Nikita Kulikov, the head of a Russian committee dedicated to exploring the matter in the country’s parliament, recently made some comments on the subject. This sheds some light on how Russian authorities reason regarding this proposed law.
“The constant growth trend in crimes using virtual assets, and the lack of consumer protection in the face of this kind of criminal onslaught, naturally dictate the need to develop mechanisms for legal regulation and control of virtual asset exchange.”
It seems unlikely that this law will succeed
With that said, however, some major issues immediately become clear. Although a case could be made that regulators should seek to minimize the potentially hazardous effects of cryptocurrencies, it is unclear to say the least whether confiscation is the right way to do this.
According to the recent report, Russia is deciding whether to create a government cryptocurrency for transferring funds. Nevertheless, before Russia would be able to legally justify cryptocurrency confiscation, it would need to legally recognize cryptocurrency.
However, Russian cryptocurrency owners do not need to fret yet. Even if this new proposal manages to enter into law, it is not clear how authorities would go about doing this. Theoretically, cryptocurrency held on an exchange could potentially be accessed.
Nonetheless, this would not be possible if the crypto investor in question holds the private keys to the crypto wallet. As such, it is entirely possible that this proposal reveals a fundamental misunderstanding of decentralized cryptocurrencies such as Bitcoin. No matter what, it will be interesting to see how this proposal develops.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.