Russian prosecutors claim that government agencies require cryptocurrency wallets and exchange access.

The Prosecutor’s Office Demands That Russian Investigators Have Cryptocurrency Wallets
According to the business daily Kommersant, Russian prosecutors are convinced that investigative authorities, among other government bodies, should be allowed to set up crypto wallets and store and convert confiscated digital coins to fiat money.

Prosecutor Madina Dolgieva of the Office’s Main Judicial Department told participants in an e-justice round table discussion that the Prosecutor General’s Office has consistently advocated for recognizing digital assets as property that can be seized if acquired criminally.

During the meeting, which was organized by the Federation Council’s Committee on Constitutional Legislation and State Building, Dolgieva stated that courts are still making contradictory decisions — some recognize crypto as property, while others do not.

In Russia, cryptocurrencies are still not fully regulated, with the current law “On Digital Financial Assets,” which went into effect in 2021, only answering a limited set of questions. A bill introducing amendments is currently being debated in Russia’s State Duma, the lower house of parliament.

Confiscating a physical wallet with virtual assets, for example, is only half the job because the cryptocurrency must still be cashed out, according to Madina Dolgieva. And that’s where the problems start, she says, because domestic exchanges have yet to be licensed, and the prosecutor’s office cannot use foreign platforms.

The prosecutor believes it is necessary to allow investigating authorities to open their own wallets and convert cryptocurrency, the circulation of which has increased significantly in the Russian Federation since the government imposed restrictions on foreign currency transfers in February of this year.

The proposal comes despite the Central Bank of Russia’s opposition to legalizing cryptocurrency transactions in the country. The monetary authority backed the draft law submitted to the Duma on the condition that even mining rewards be exchanged outside of Russia or only under special ‘experimental legal regimes’ within Russia.