Russia’s civic chamber proposes fund for seized crypto assets

Evgeny Masharov, a member of the Russian Civic Chamber, has proposed forming a government cryptocurrency fund that would include assets confiscated from criminal proceedings.

Masharov said on March 20 that the crypto fund would aim for revenues for the government and target social projects.

The move follows the increased adoption of cryptocurrency reserves in countries such as the US, which has led legal activists in Russia to demand a similar framework.

Masharov pushes for a dedicated fund for seized crypto assets

Evgeny Masharov has suggested that the cryptocurrency fund proceeds can be used for social, environmental, and educational projects.

His suggestion comes as Russian authorities moved forward with new legislation that would recognize cryptocurrencies as property for the purposes of criminal procedure laws.

Alexander Bastrykin, Russia’s Investigative Committee chairman, claimed that the government had received a related draft bill for consideration.

In response to the proposed legislation, Masharov said, “Cryptocurrencies confiscated as part of criminal proceedings must work for the benefit of the state.”

Moreover, Masharov declared confidently that the market capitalisation of many of the seized crypto assets might “rise significantly over time.” He said, “For these purposes, a special fund can be created, putting cryptocurrencies on its balance.”

The governor of the Bank of Russia opposes investing in cryptocurrency

Masharov’s proposal to use seized cryptocurrency assets for the government’s advantage comes after years of related legislation being developed in Russia.

While no framework has been clearly defined, Russian prosecutors have advocated for legal initiatives since 2021 that would allow the government to seize cryptocurrencies gained through illegal means.

At the same time, its government has seized the opportunity to confiscate millions of cryptocurrencies in criminal cases, which sometimes involve the police.

The inclusion of a potential social cryptocurrency fund in Russia may sound similar to initiatives like a Bitcoin strategic reserve, which currently targets holding confiscated BTC alone.

In a separate development, the Bank of Russia recently introduced a plan to enable rich Russian investors to trade in cryptocurrency assets in a 3-year scheme. Launched on March 12, President Vladimir Putin ushered in the initiative on direct orders and called for increased transparency while admitting the risks associated with cryptocurrency trading.

This initiative would limit participation to investments only for those with at least 100 million rubles (roughly $1.2 million) of assets and an annual income of more than 50 million rubles in 2024.

Elvira Nabiullina, the governor of Russia’s central bank, has previously disagreed with the Bank of Russia’s decision to invest in cryptocurrency.

Nabiullina expressed her concerns regarding cryptocurrency’s financial stability risks to the country’s economy: “Cryptocurrency investment doesn’t make any sense for the Central Bank in terms of preserving value since it’s a very volatile asset.”

The central bank believes that although cryptocurrency may be valuable as a personal investment vehicle, it is too volatile for internal payments.