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Russia prepares law to allow crypto currency confiscation

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Russia Prepares Law to Allow Cryptocurrency Confiscation

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According to local reports, Russia’s Ministry of Internal Affairs and other law enforcement agencies are developing proposals to confiscate cryptocurrencies. These proposals could evolve into Russian laws as soon as 2021. 
“Russia plans to develop a legal mechanism for the seizure of virtual assets for their confiscation,” according to a translated report from RBC. “The relevant proposals should be prepared by December 31, 2021 by the Ministry of Internal Affairs together with [federal financial monitoring branch] Rosfinmonitoring, the Prosecutor General’s Office, the Investigative Committee, the Justice Ministry … the Federal Customs Service and the Federal Security Service with the participation of the Supreme Court.”
Decentralized, blockchain-based cryptocurrencies like bitcoin would be very difficult, if not impossible, to confiscate. The initial report did not elaborate on how, specifically, the government would seize cryptocurrency under a new regulation.
Russia and Cryptocurrency Regulation
Many Russians have a positive relationship with cryptocurrencies. Ironically, even the government has had its hand in blockchain- and cryptocurrency-based initiatives. 
President Vladimir Putin met with Ethereum co-founder Vitalik Buterin in June 2017, leading many to believe it was a signal of support for digital currencies from the Kremlin. The president also attended the St. Petersburg International Economic Forum that same month, where he claimed that enhancing the Russian economy and increasing average income could be achieved through the adoption and acceptance of “innovative technologies.” One of Putin’s aides leased an abandoned aluminum plant located in northern Russia to a Bitcoin mining company.
However, regulation around cryptocurrencies in Russia has been a tad murky.
In May 2019, local news medium Fontanka reported that Dmitry Medvedev, the Russian prime minister, had dismissed the issue of regulating cryptocurrency. While speaking at a legal conference in St. Petersburg, the lawmaker had explained that cryptocurrency may have lost its appeal to the masses.
“Nowadays, the popularity of cryptocurrency has decreased, and regulatory issues may not be so relevant,” he argued. 
So, those who advocated for regulations believed that Russia would get its day when crypto prices rose again. And prices did rise. Bitcoin surged to about $13,500 in June 2019, but this didn’t move the Russian government, as many had expected, to regulate the sector. 
But some progress toward cryptocurrency regulation clarity in Russia was made this year.
Called Russia’s “digital rights act,” it defines smart contracts and digital tokens in a legal sense. Whether it was due to the involvement of his aides or just a fascination with the technology, President Putin seemed ready to open Russia’s doors to the innovative technologies that he touted in St. Petersburg. 
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