Russia Considers Crypto Fund from Seized Assets for Social Projects

According to Cointelegraph, legal activists in Russia are advocating for the establishment of a government cryptocurrency fund utilizing assets confiscated from criminal activities. Evgeny Masharov, a member of the Russian Civic Chamber, has proposed this initiative, aiming to generate revenue for the government to support social, environmental, and educational projects. Masharov emphasized that cryptocurrencies seized during criminal proceedings should benefit the state, suggesting that a special fund could be created to manage these assets. This proposal emerges as Russian officials advance legislation to recognize cryptocurrencies as property within criminal procedure laws. Alexander Bastrykin, Chairman of Russia’s Investigative Committee, announced that a related draft bill has been submitted to the government for review. Masharov expressed confidence that the market capitalization of many seized crypto assets could increase significantly over time, benefiting the state further. The initiative follows years of legislative development in Russia concerning the seizure of crypto assets obtained through criminal activities. Since 2021, Russian prosecutors have been advocating for legal measures to allow the government to confiscate such assets, although a clear framework has yet to be established. Despite this, the Russian government has already seized millions in cryptocurrency from illegal cases, including those involving law enforcement officials. However, current laws lack guidelines on the distribution of these funds. While the idea of a social crypto fund in Russia is being considered, it faces opposition from the Bank of Russia. Elvira Nabiullina, the central bank governor, has previously expressed strong opposition to potential crypto investments by the Bank of Russia, citing the volatility of cryptocurrencies as a concern for preserving value. In December 2024, Nabiullina reiterated that cryptocurrency investment does not align with the Central Bank's objectives. The proposal for a government-managed cryptocurrency fund in Russia reflects a growing interest in leveraging digital assets for public benefit, despite ongoing debates and regulatory challenges. As the country continues to navigate the complexities of cryptocurrency legislation, the potential establishment of such a fund could mark a significant step in integrating digital assets into state-managed projects.