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Russia Proposes New Legislation for Bitcoin, Criminalizing Transfers Through Third Parties
Russia’s main federal investigating authority, the Investigative Committee, has put forward a proposal that could potentially affect the country’s cryptocurrency market. The proposal, announced by Chairman Alexander Bastrykin, aims to legally recognize Bitcoin as property and impose criminal liability for transferring electronic payment instruments to third parties.
Current State of Russian Law
Currently, Russian law doesn’t have a standardized way to handle cryptocurrency in criminal cases. The proposed amendments would officially classify crypto as property, allowing authorities to treat it as evidence and set guidelines for freezing and confiscating cryptocurrencies.
Addressing the Issue of “Droppers”
The committee is addressing the illegal use of third-party bank accounts, often referred to as “droppers,” to facilitate cryptocurrency transactions. This practice is common among crypto newbies who rely on peer-to-peer services of centralized crypto exchanges. However, Russian banking rules limit their ability to buy crypto directly, forcing them to “buy access” to someone else’s banking app.
“In most cases, this is due to the fact that when frequently conducting crypto buy or sell transactions, users’ bank cards are blocked under Federal Law 115-FL, and they are forced to close their accounts. As a result, an individual who frequently buys and sells cryptocurrency is forced to ‘buy access’ to a third party’s banking app in order to conduct transactions through their account, effectively using the services of a dropper for their own purposes.”
Legal Implications
The proposal has sparked debate among legal experts, with some arguing that crypto wallets are not considered electronic payment instruments, while others believe they are. The initiative to criminalize the transfer of such electronic payment instruments to nominee parties is understandable, given the lack of transparency in cryptocurrency transactions.
Key Points to Consider
- The proposed amendments would bring more clarity to criminal investigations involving cryptocurrency.
- The laws should address practical issues, like how crypto can be seized, frozen, or used as evidence in criminal cases.
- The development of regulations in this area is crucial to increasing the number of solved crimes related to cryptocurrency.
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