A bill No. 902782-8 "On Amendments to Article 104.1 of the Criminal Code of the Russian Federation and the Criminal Procedure Code of the Russian Federation" (hereinafter – the "Bill"), providing for the recognition of digital currency as property and establishing the procedure for its seizure within the framework of criminal proceedings, was submitted to the State Duma of the Russian Federation on April 24, 2025. The Government of the Russian Federation acted as the subject of the legislative initiative right.
The Bill proposes amendments to Article 104.1 of the Criminal Code of the Russian Federation and the subsequent recognition of digital currency as property for the purposes of criminal and criminal procedure legislation. It should be noted that within the framework of legislation on enforcement proceedings and on combating corruption, digital currency is already recognized as property1. Consequently, the novel provision will eliminate the existing legal gap and develop a unified legal approach with other branches of law.
The recognition of digital currency as property will allow a number of procedural actions to be taken against it by the court and investigative authorities. For this purpose, it is proposed to introduce a new Article 1642 into the Criminal Procedure Code of the Russian Federation, regulating the actions of an investigator (inquiry officer) in cases where digital currency is discovered during investigative actions (e.g., a search). Thus, the investigator (inquiry officer) is granted the authority to seize digital currency. Depending on the technical features of digital currency storage ("hot" or "cold" wallet), the Bill provides for the possibility of:
- for "cold" wallets – seizure of the physical medium containing the digital currency or access codes to it;
- for "hot" wallets – transfer of the digital currency to a special address-identifier ensuring its safekeeping and blocking, in the manner established by the Government of the Russian Federation.
It is assumed that these measures may be applied simultaneously. Furthermore, the participation of a specialist is mandatory in the investigative action during which the seizure of digital currency is carried out. The protocol of the investigative action must contain detailed information regarding the type of digital currency, its quantity, and in the case of transferring the digital currency to an address-identifier: also the address-identifiers of the sender, recipient, and other data necessary to identify the digital currency transaction. Seized digital currency will be stored in the manner established by the Government of the Russian Federation.
The amendments will also affect Article 115 of the Criminal Procedure Code of the Russian Federation, which will detail the procedure for judicial seizure (arrest) of digital currency. When imposing seizure (arrest) on digital currency stored on a "cold" wallet3, the physical medium is initially subject to seizure. To ensure the safekeeping of the digital currency and if technically feasible, a subsequent transfer to an address-identifier is also carried out. When imposing seizure (arrest) on digital currency stored on a "hot" wallet, the court will have the right to completely prohibit or restrict all transactions with it. Such measures are necessary to completely exclude third-party access to the digital currency subject to seizure.
Lidings Commentary:
It is worth noting that the seizure and arrest of crypto ("digital") assets within the framework of criminal proceedings have been carried out before4. The purpose of the Bill is to create appropriate legal mechanisms for effectively countering the use of digital currency in criminal activity and corresponds with international recommendations, in particular, the Recommendations of the Financial Action Task Force (FATF)5.
At the same time, a number of key issues, such as the procedure for the transfer, accounting, and storage of seized digital currency, will be regulated by separate acts of the Government of the Russian Federation, which leaves significant room for further rule-making.
[2] Explanatory Note to the draft Federal Law "On Amending Article 104.1 of the Criminal Code of the Russian Federation and the Criminal Procedural Code of the Russian Federation."
[3] This refers to storage on a physical medium or access to which is provided through information recorded on a physical medium.
[4] Judgment of the Balashikha City Court of the Moscow Region dated 7 December 2024 No. 1-350/2024.
[5] FATF Recommendations, as amended in February 2025. International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation.