Russia Sets Rules to Convert Seized Bitcoin Into State Revenue

• Russia creates a legal process to convert seized Bitcoin into state revenue.
• Authorities confiscated 1,032 BTC in a bribery case, setting a legal precedent.
• Lawmakers debate crypto regulations, delaying broader legal clarity in Russia.

Russian authorities have created a legal pathway to convert seized Bitcoin into state revenue, marking a major shift in Russia’s handling of cryptocurrencies. The decision follows a high-profile bribery case where officials confiscated 1,032 BTC. 

Dmitry Aristov, head of the Federal Bailiff Service (FSSP), called Bitcoin a “problematic asset.” In a meeting at the Federation Council Committee on Constitutional Legislation and State Building. Aristov said the FSSP now has methods to sell seized Bitcoin and add the proceeds to the Treasury. The agency is working with other organizations to finalize the process.

The move follows a legal precedent from a recent criminal case. Aristov confirmed that Bitcoin had been successfully confiscated during the investigation. However, he stated that lawmakers must create a comprehensive legal framework. He urged officials to define the status of Bitcoin in Russia before expanding seizure protocols.

Russia has struggled to regulate cryptocurrency. Last year, lawmakers passed two crypto-related laws. One recognized crypto mining as a legal business. The other allowed firms to use crypto for international trade within a Central Bank-controlled sandbox. Despite these developments, restrictions remain in place. Russian law still prohibits crypto as a payment method inside the country.

Related: Russia Explores Crypto Trading for Qualified Businesses

The Central Bank has proposed stricter regulations. It supports banning retail and corporate crypto investments outside the sandbox. Officials also want to prevent unregulated crypto exchanges from operating in Russia. However, several ministries and major mining companies disagree and advocate for clearer regulations rather than outright bans. The debate has stalled further progress.

The recent Bitcoin seizure stems from the case of Marat Tambiev, a former Russian investigator. Authorities convicted Tambiev of accepting Bitcoin bribes from the Infraud Organization hacker group. A court sentenced him to 16 years in prison, while officials confiscated his 1,032 BTC and transferred the funds to the Treasury in January.

Moscow is now considering new laws to treat cryptocurrencies as property in criminal cases. The government is reviewing a proposal to create a state fund for seized crypto. Some lawmakers believe the proceeds could support social programs. Russia’s approach to crypto remains divided. Bailiffs now have a system to convert Bitcoin into cash, however, broader regulations remain uncertain. Officials continue to debate the future of crypto assets in the country.

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