Authorities are looking for a way to confiscate virtual assets as they can do with more traditional forms of ownership. Russia wants to take over bitcoins, but does it have a way of doing so?

Nationalisation

The Russian Ministry of the Interior wants to develop legal solutions enabling agencies to force criminals to give up their bitcoin revenues. The solution is to be proposed by December 2021, according to the Russian RBC.

In order to achieve its goal, the Ministry will join forces with the financial regulator (Rosfinmonitoring), the Prosecutor General’s Office, the Investigation Committee, the Ministry of Justice, the Supreme Court and other important public administration entities. We can be sure that Russia is taking the whole process extremely seriously.

The long-awaited regulation on crypto assets has, in a more general way, been stuck somewhere in the Russian parliament, which further complicates the whole legislative process. The legal definition of crypto-currency is an important element in the process of creating appropriate regulations. An erroneous definition of bitcoin may cause the new laws to have no satisfactory force.

Towards a Russian hilltop

If Russia wants to take over the bitcoins of cybercriminals, it must be ready to face up to a wide range of challenges. These problems are also manifested in the technical security of the decentralised coins themselves. Nevertheless, the authorities may try to compromise with the stock exchanges, which could freeze funds if they suspect that they are illegal. This is what Nikita Kulikov, a member of one of the expert committees of the Russian Duma, says.

In addition, agencies may be forced to create their own cryptowallets and find a way to exchange seized funds. Kulikov suggests that in this case the solution could be to create a central crypto exchange or a crypto-rubel, which could mediate exchanges.

Position of the central bank

The Russian central bank remains passive in the face of the whole discussion. As it turns out, there is currently no pressure to create a crypto-currency response to the Russian currency. The question remains whether the lack of involvement of the most important monetary institution poses a serious threat to the success of the project.