Russia proposes a dedicated fund for confiscated crypto

The authorities of Russia are considering the creation of a government fund intended for crypto seized in the context of criminal proceedings.

Evgeny Masharov, member of the Russian Civic Chamber, has put forward this proposal with the aim of allocating the proceeds from confiscated cryptocurrencies to social, educational, and environmental projects.

 Russia and the confiscation of crypto: a growing phenomenon  

Masharov emphasized how the creation of a government cryptocurrency fund could represent an advantage for the country.

“The cryptocurrencies confiscated in the context of criminal proceedings must work to the benefit of the State”, he stated, as reported by the TASS news agency on March 20. 

The idea is to use these assets in a strategic perspective, allocating them to causes of public utility and providing a more structured model compared to the current management of these assets.

The initiative emerged in the context of the growing attention of the Russian government towards digital resources. 

Alexander Bastrykin, president of the Investigative Committee of Russia, confirmed that a related bill has already been sent to the government for evaluation, as reported by the RBC agency on March 19.

In recent years, Russian authorities have intensified efforts to regulate the management of cryptocurrencies seized in judicial contexts.

Since 2021, Russian prosecutors have been working on legal initiatives to allow the government to seize illicitly obtained cryptocurrencies, but so far a clear regulatory framework on how these funds should be used has not been defined.

In the meantime, despite the lack of specific regulation, the Russian government has already confiscated millions of dollars in cryptocurrencies, often in cases related to illegal operations that also involved law enforcement officials.

Currently, there are no precise regulations that define where and how these assets should be redistributed, making more structured regulation essential.

Economic Outlook and Central Bank Resistances  

Despite the growing governmental interest in the strategic use of confiscated cryptocurrencies, the Bank of Russia maintains a skeptical stance on investments in digital assets. 

Elvira Nabiullina, governor of the Russian Central Bank, has repeatedly reiterated her opposition to any form of investment in cryptocurrencies by the central bank.

“Investment in cryptocurrency does not make sense for the Central Bank in terms of value preservation, as it is a highly volatile asset”, Nabiullina stated in December 2024. 

His position reflects the more restrictive strategy adopted by Russia in the cryptocurrency sector, despite the government’s openness towards their use in the economic field.

The idea of a “cryptocurrency social fund” proposed by Masharov could prove to be an effective solution for providing a useful destination for digital assets seized by the State. 

However, it remains to be seen how the Russian government will integrate this proposal with its current regulation on cryptocurrencies.

The debate between financial authorities and the government remains open: while Parliament and investigative authorities are considering a concrete use of confiscated cryptocurrencies, the Central Bank continues to hold back on its possible applications in the national economic system. 

The implementation of this proposal will therefore depend on Russia’s ability to balance economic, legal, and financial interests in a constantly evolving sector.