Russia Outlines Plan to Confiscate Cryptocurrency Linked w/ Criminal Activities

[cheezcarls]

Until this point, the Russian government has stalled on the enforcement of regulations for its cryptocurrency industry. However, in the wake of rampant crypto-enabled criminal activities in the country, it would seem that authorities are finally seeing the need to step in.

Earlier today, local business news medium RBC reported that several government agencies have been tasked with developing and enforcing procedures for seizing digital assets that have been linked with crime.

As the report notes, the Russian government is working on developing a legal means of seizing virtual assets, and it has called on agencies such as the Ministry of Internal Affairs, the Prosecutor General’s Office, the Justice Ministry, among others. With the participation of the Russian Supreme Court, all of these agencies are expected to develop a mechanism of seizing these assets by Dec 31, 2021.

Source link for the full news here

For me, I think it’s a great step forward for Russia to do this when someone is committing crime using a specific kind of cryptocurrency. However, I also think that it’s not gonna be easy to confiscate them due to several factors.

Like for example, a hardware wallet was used for doing criminal transactions or other stuff. The criminal could easily create a new wallet address in a hardware wallet and just send it there. He may create a “fake story” that the hardware wallet was lost somewhere, but the truth is, was handed to another criminal and quickly doing other criminal transactions.

This is the challenge when the government is trying to confiscate it. He might even send some of it to a random address. These are just several factors that would make confiscation hard and complicated.

I just hope that other countries would do this too, but there are great challenges ahead like the example above. What do you guys think about Russia’s plan? Do you think it would work in the long run? For me, it may work, but if the criminal is an expert and creative in his plans, it would give them a hard time to locate it. Just sayin’.
 

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[audaciousbeing]

There is no need for discussing this because its nothing other than what is applicable since time immemorial every assets that is being used for illegal activities forfeited to the state. I have read news of assets of money launderers being auctioned off to the general public while assets that cannot be confiscated will be destroyed. We have also learned about bitcoin auctioned by the state apparatus somewhere in Europe of those that was seized from those found wanting. So, what the Russian government is merely doing is putting it on records so anyone don't hide under the rule that 'since its not written, it does not exist'' or 'the law is silent on matters that relates to that''.

[CryptoBry]

I just hope that other countries would do this too, but there are great challenges ahead like the example above. What do you guys think about Russia’s plan? Do you think it would work in the long run? For me, it may work, but if the criminal is an expert and creative in his plans, it would give them a hard time to locate it. Just sayin’.
 

Russians are known to be good in the use of the latest technologies and I am sure that they know how to track the criminals and their use of cryptocurrency, in fact I must say that investigating cryptocurrency transactions can be easier than going to the field because here you are not starting from zero. In USA, there had been many successful confiscation that even resulted into the FBI to be one of the biggest holder of Bitcoin. I am sure that Russians are more capable than their USA counterparts.

There is no place for criminals activities in any country, whether that country is approving of the cryptocurrency industry or not. In a country like Russia where the government is generally skeptical on the use, trade and acceptance of Bitcoin and cryptocurrency, news like this is certainly not helping in our hope that this country will accept and recognize this fledgling industry.

[coolcoinz]

Another law to give the corrupt police more authority to steal money from others. While some of you may see this as a positive, because the law has now the right to confiscate stolen goods, it also gives them the right to do it on false pretenses. Just go to reddit and read some stories about police raids on private homes. You'll see that once you let them search your place things tend to disappear. When you request something to be returned you'll hear that it's not on the list of confiscated goods or that it was lost in processing and there's nothing you can do. These things happen in the US and the EU, so imagine how the events will unfold in Russia.

[bittraffic]

Another law to give the corrupt police more authority to steal money from others. While some of you may see this as a positive, because the law has now the right to confiscate stolen goods, it also gives them the right to do it on false pretenses. Just go to reddit and read some stories about police raids on private homes. You'll see that once you let them search your place things tend to disappear. When you request something to be returned you'll hear that it's not on the list of confiscated goods or that it was lost in processing and there's nothing you can do. These things happen in the US and the EU, so imagine how the events will unfold in Russia.

That is also another way of looking it.  Its hard to prove murder without a dead body or a physical evidence. In the case of digital currencies, it a lot harder to find criminals when they don't submit KYC. They may be successful in tracking and confiscating coins from criminals if they find one but what would make these police do the right thing because now that all is digital all can be mixed together in anonymity are all can vanish without a trace.

[coolcoinz]

That is also another way of looking it.  Its hard to prove murder without a dead body or a physical evidence. In the case of digital currencies, it a lot harder to find criminals when they don't submit KYC. They may be successful in tracking and confiscating coins from criminals if they find one but what would make these police do the right thing because now that all is digital all can be mixed together in anonymity are all can vanish without a trace.

It works the other way too. In a modern country you're innocent until proven guilty, but in some parts of the world, and I believe Russia to be one of them, you are guilty until proven innocent.
If they raid your home and find out you have a hardware wallet it's going to get seized and you will be forced to unlock it. How? They will threaten to beat you up for starters or put you in a cell with a convicted rapist. Even if you are later proven innocent your wallet will be empty and due to the nature of digital currencies you will be unable to prove you had any coins in the first place.

[candy27]

Another law to give the corrupt police more authority to steal money from others. While some of you may see this as a positive, because the law has now the right to confiscate stolen goods, it also gives them the right to do it on false pretenses. Just go to reddit and read some stories about police raids on private homes. You'll see that once you let them search your place things tend to disappear. When you request something to be returned you'll hear that it's not on the list of confiscated goods or that it was lost in processing and there's nothing you can do. These things happen in the US and the EU, so imagine how the events will unfold in Russia.

Ha! That's exactly what I thought.

Russia is scared that people using crypto will by-pass the state. So apparently they're all criminals, giving the state the excuse to crack down on them.

[squatter]

As the report notes, the Russian government is working on developing a legal means of seizing virtual assets, and it has called on agencies such as the Ministry of Internal Affairs, the Prosecutor General’s Office, the Justice Ministry, among others. With the participation of the Russian Supreme Court, all of these agencies are expected to develop a mechanism of seizing these assets by Dec 31, 2021.

Bizarre -- I never imagined this would be an issue, in Russia of all places. The US government never hesitated to seize Ross Ulbricht's bitcoins after the Silk Road bust. They just followed the typical process for seizing and liquidating any assets associated with criminal activity.

I'm surprised there aren't similar processes in place in Russia. And now it's still going to take them 2+ more years to develop them?

Another law to give the corrupt police more authority to steal money from others. While some of you may see this as a positive, because the law has now the right to confiscate stolen goods, it also gives them the right to do it on false pretenses.

Corrupt police would just steal your cryptocurrency anyway, same as cash. That's the status quo today, and it will be no different after these legal mechanisms are developed.

[1Referee]

If they raid your home and find out you have a hardware wallet it's going to get seized and you will be forced to unlock it. How? They will threaten to beat you up for starters or put you in a cell with a convicted rapist. Even if you are later proven innocent your wallet will be empty and due to the nature of digital currencies you will be unable to prove you had any coins in the first place.

That's why it's so important to distribute your cold wallet holdings amongst multiple hardware/paper wallets. If you are forced to somehow hand over your wallet to the authorities or any other criminal, you can give them your least valuable one and not lose everything at once. Simple yet very effective measures.

I personally have 5 cold wallets currently while I used to have everything in one single wallet two years ago. I probably will distribute these coins amongst even more wallets in the future. The same trend of coin distribution can be noticed if you follow the Bitcoin rich list where the number of extremely rich addresses in number of coins are shrinking.

[hugeblack]

When governments talk about "digital assets," this does not mean Bitcoin (cryptocurrency) but extends to many digital currencies.
The government has many ways to track such operations, including checking your income level. If you have a lot of money suddenly, the government will find out sooner or later.
You need organized money laundering if you have criminality-related cryptos, which is something that requires traditional means, so the use of cryptocurrencies may not be meaningful for a lot of money.

Do not forget the possibility of tracking, central platforms, and others.

[bittraffic]

That is also another way of looking it.  Its hard to prove murder without a dead body or a physical evidence. In the case of digital currencies, it a lot harder to find criminals when they don't submit KYC. They may be successful in tracking and confiscating coins from criminals if they find one but what would make these police do the right thing because now that all is digital all can be mixed together in anonymity are all can vanish without a trace.

It works the other way too. In a modern country you're innocent until proven guilty, but in some parts of the world, and I believe Russia to be one of them, you are guilty until proven innocent.
If they raid your home and find out you have a hardware wallet it's going to get seized and you will be forced to unlock it. How? They will threaten to beat you up for starters or put you in a cell with a convicted rapist. Even if you are later proven innocent your wallet will be empty and due to the nature of digital currencies you will be unable to prove you had any coins in the first place.

Very unfortunate for the cryptoholder. It can happen to all countries, that's what they call "old-fashioned police work" we've seen the worst. This is just a plan for now, if approved, it could be one of the most dangerous place for crypto users. Isn't Vitalik and Sasha of Waves from Russia?

Many will probably oppose the law so its not going to be approved. Putin seem to be a reasonable guy and he knows this isn't a perfect law.

[rodel caling]

There is no need for discussing this because its nothing other than what is applicable since time immemorial every assets that is being used for illegal activities forfeited to the state. I have read news of assets of money launderers being auctioned off to the general public while assets that cannot be confiscated will be destroyed. We have also learned about bitcoin auctioned by the state apparatus somewhere in Europe of those that was seized from those found wanting. So, what the Russian government is merely doing is putting it on records so anyone don't hide under the rule that 'since its not written, it does not exist'' or 'the law is silent on matters that relates to that''.

Yes I agree with you even paper money can use it a lot of illegal activities and transactiin of the criminals, crypto currency is good but the some users they  bring it into the worse situations specially the criminals that's why government want to regulate crypto to to bring it the good reputation.

[Theb]

For me, I think it’s a great step forward for Russia to do this when someone is committing crime using a specific kind of cryptocurrency. However, I also think that it’s not gonna be easy to confiscate them due to several factors.

Like for example, a hardware wallet was used for doing criminal transactions or other stuff. The criminal could easily create a new wallet address in a hardware wallet and just send it there. He may create a “fake story” that the hardware wallet was lost somewhere, but the truth is, was handed to another criminal and quickly doing other criminal transactions.

This is the challenge when the government is trying to confiscate it. He might even send some of it to a random address. These are just several factors that would make confiscation hard and complicated.

I just hope that other countries would do this too, but there are great challenges ahead like the example above. What do you guys think about Russia’s plan? Do you think it would work in the long run? For me, it may work, but if the criminal is an expert and creative in his plans, it would give them a hard time to locate it. Just sayin’.
 

I don't think you get how scary this law will be for normal hodlers of cryptocurrency in that country. Don't you get it that even if you are unaware the money you are receiving has somehow been tainted by illicit activities the government has the power to confiscate it at their will? It doesn't matter how complicated it will be or how hard it will be for them since all they need to do is to follow all the transactions and connect a single piece of evidence and it will be enough for them to say that what you are holding is illegal. This kind of power shouldn't be given to the authorities in the first place since it makes their citizens scared of hodling cryptocurrencies much more accept them as payment since they don't know where it will be coming from or where it has been.

[figmentofmyass]

I don't think you get how scary this law will be for normal hodlers of cryptocurrency in that country. Don't you get it that even if you are unaware the money you are receiving has somehow been tainted by illicit activities the government has the power to confiscate it at their will?

yeah but that's already the letter of the law with rubles and more traditional payment methods. if you get caught receiving stolen goods or illicit fiat proceeds, it's already confiscatable. the government is just extending that legal theory to digital assets, which aren't defined in the law yet.

defining cryptocurrency in the law may actually grant it some legitimacy.

[Theb]

I don't think you get how scary this law will be for normal hodlers of cryptocurrency in that country. Don't you get it that even if you are unaware the money you are receiving has somehow been tainted by illicit activities the government has the power to confiscate it at their will?

yeah but that's already the letter of the law with rubles and more traditional payment methods. if you get caught receiving stolen goods or illicit fiat proceeds, it's already confiscatable. the government is just extending that legal theory to digital assets, which aren't defined in the law yet.

defining cryptocurrency in the law may actually grant it some legitimacy.

We do have a law related to purchasers of stolen goods/properties in good faith but the thing here is even the unknowing buyer/seller receiving the stolen goods (crypto in this case) doesn't have any direct links to the crime but he has the legal obligation to return the funds back provided that his money or the item he exchange for it will be returned. In what the Russian government is trying to propose they will just instantly confiscate the cryptocurrency without even returning anything to the unaware party. This part is where the Russian citizens are in a bad position since really they don't have any kind of protection once their money is confiscated by their own government.

[figmentofmyass]

yeah but that's already the letter of the law with rubles and more traditional payment methods. if you get caught receiving stolen goods or illicit fiat proceeds, it's already confiscatable. the government is just extending that legal theory to digital assets, which aren't defined in the law yet.

defining cryptocurrency in the law may actually grant it some legitimacy.

We do have a law related to purchasers of stolen goods/properties in good faith but the thing here is even the unknowing buyer/seller receiving the stolen goods (crypto in this case) doesn't have any direct links to the crime but he has the legal obligation to return the funds back provided that his money or the item he exchange for it will be returned. In what the Russian government is trying to propose they will just instantly confiscate the cryptocurrency without even returning anything to the unaware party. This part is where the Russian citizens are in a bad position since really they don't have any kind of protection once their money is confiscated by their own government.

that's how it works in the USA. the police can seize any property by claiming it has been involved in criminal activity. the property owner doesn't need to be found guilty of a crime; the police can simply take his property. fighting to recover the property is extremely burdensome and the success rate is low, so most people don't bother.

https://www.heritage.org/research/reports/2014/03/civil-asset-forfeiture-7-things-you-should-know

Being innocent does not mean that a state has to return your property. The Supreme Court of the United States has held that the “innocent owner” defense is not constitutionally required. Furthermore, even in states where you do have an innocent owner defense, the burden is typically on you. Your property is presumed to be guilty until you prove that you are innocent and that your property therefore should not be forfeited. In other words, you must prove (1) that you were not involved in criminal activity and (2) that you either had no knowledge that your property was being used to facilitate the commission of a crime or that you took every reasonable step under the circumstances to terminate such use. And all the while, the police retain your property. To cap it all off, the success rate for winning back property is low. Pragmatic property owners, however innocent, may reason that it is best to cut their losses rather than challenge the forfeiture in court.

i assumed that russia was no different but perhaps i'm wrong about that.