On February 10, the State Duma of the Russian Federation passed a law in its third reading that establishes the procedure for seizing and confiscating digital currencies within criminal proceedings. For these purposes, cryptocurrency is recognized as property.

Experts surveyed by ForkLog believe that while the document creates a legal framework for confiscation, it fails to address critical issues. It does not outline a method for assessing volatile assets, rules for their subsequent storage, or details on practical interactions with foreign crypto platforms under sanctions.

What Does the Law State?

Seizure of digital currency and devices that provide access to it occurs during investigative actions with the involvement of a specialist. The protocol specifies the type of asset, its quantity, and identifying addresses. Carriers and access information for the cryptocurrency are stored in a sealed manner.

“If technically feasible,” the digital currency may be transferred to a special address for safekeeping. The government of the Russian Federation will determine the procedure for this and subsequent storage.

After seizure, operations with these assets are completely or partially halted depending on the court's decision. Cryptocurrency platforms are required to provide information relevant to the investigation.

The law awaits approval from the Federation Council and the president's signature. It will come into effect ten days after publication.

Framework Without Details

The adopted document was developed by the Ministry of Justice of the Russian Federation in May 2025. It outlines only general enforcement frameworks. Specific details will be established through subordinate legislation.

For instance, the law does not contain a method for calculating the amount of damage to be compensated from crypto assets, considering their volatility. The need for a valuation mechanism for digital currencies was specifically mentioned by the State Duma's Financial Market Committee in its conclusion on the document.

As suggested in a comment to ForkLog by Ignat Likhunov, founder of the legal agency Cartesius, courts will currently rely on general practices regarding property crimes, where damage is most often assessed based on the market value of the asset at the time of the offense.

“Regarding claims for ‘lost profits’ due to the temporary seizure of assets, criminal proceedings primarily allow for the recovery of actual damages, not lost income. Although such claims are theoretically possible in civil proceedings, their satisfaction in practice is a complex and non-obvious issue, often hinging on real access to the crypto,” the lawyer explained.

He pointed to a key caveat in the law regarding the “technical feasibility” of transferring seized funds. According to Likhunov, if the owner of a non-custodial wallet refuses to provide access (private keys or seed phrase), forced transfer will be impossible—the investigator will only be able to seize the physical carrier.

Questions also arise regarding future interactions with crypto exchanges.

“To avoid risks, major international platforms may ignore requests from Russian law enforcement, especially if they have subsidiaries in EU jurisdictions where direct prohibitions on providing services to Russian residents exist due to the sanctions regime,” the expert commented.

Stablecoins (e.g., USDT, USDC) present a separate challenge, as their issuers can freeze funds only at the request of regulators in the U.S. or EU.

Until specific government guidelines emerge, cybersecurity measures to protect the special state wallet and penalties for those responsible in case of hacking or compromise remain undefined.

There is also a risk of asset misappropriation by unscrupulous employees.

“The mandatory involvement of an IT specialist in the seizure and the documentation in the protocol are more procedural features than effective protection. Real security will depend on the quality of internal instructions and the effectiveness of departmental oversight,” Likhunov emphasized.

Abandonment of a Unified Platform

By October 1, 2024, the Ministry of Finance, at the request of the Ministry of Internal Affairs, was to explore the creation of a state digital platform for storing confiscated cryptocurrencies.

Based on the text of the adopted law, by 2026, the idea of a “super-service” has transformed into a system of special state-controlled crypto wallets. The technical regulations for their operation are still unknown and will be approved through subordinate legislation.

Additionally, mechanisms for selling confiscated digital assets for state revenue will need to be refined.

Andrey Tugarin, founder of GMT Legal, noted in a comment to ForkLog that some questions could be resolved by a draft law on comprehensive regulation of digital currency circulation, which will soon be submitted to the State Duma. This will introduce mandatory requirements for crypto exchanges, including asset storage in digital depositories.

“Depositories will fulfill the function of this ‘technical feasibility’ referenced in the articles on the seizure and confiscation of digital currency. They will operate for both private and state needs, ensuring secure storage. Until the central bank sees such a guarantee, depositories are unlikely to operate, just as the provisions of the adopted law cannot be fully implemented,” the expert concluded.

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Discussions about the need to include cryptocurrencies in criminal legislation for investigating theft cases and the possibility of seizure have been ongoing since 2021. Back then, the Prosecutor General's Office presented the first norms allowing digital assets to be recognized as objects of crime and to be confiscated.

However, there was already some practice in relevant procedures in Russia, albeit not always successful.

If you are interested in the technical aspects of cryptocurrency seizure, read a special article on ForkLog.