As the use of cryptocurrency reserves expands in various nations, including the United States, activists in Russia are advocating for the establishment of a potential crypto fund.
Evgeny Masharov, a member of the Civic Chamber in Russia, has put forth a proposal for a government cryptocurrency fund that would encompass assets seized from criminal cases.
The envisioned cryptocurrency fund is designed to generate revenue for the government, focusing on social projects, Masharov stated, according to a report by a local news agency on March 20.
“The earnings from the cryptocurrency fund can subsequently be allocated to social, environmental, and educational initiatives,” he commented.
“Confiscated crypto should serve the state”
Masharov’s proposal arises as Russian officials advance new legal measures to acknowledge cryptocurrencies as property in the context of criminal procedures.
Alexander Bastrykin, the head of the Investigative Committee in Russia, mentioned that a related draft bill has been submitted to the government for review, as reported by a local news agency on March 19.
“Cryptocurrencies seized during criminal proceedings must be utilized for the state’s benefit,” Masharov remarked while addressing the proposed legislation.
Evgeny Masharov, Civic Chamber member.
“To achieve this, a specific fund can be established, adding cryptocurrencies to its inventory,” Masharov expressed, noting his belief that many of the seized crypto assets could experience significant increases in market value over time.
Russian authorities have been seizing crypto assets for years
Masharov’s suggestion to repurpose confiscated crypto assets for state benefits follows years of legislative developments in Russia.
Russian prosecutors have been advocating for legal frameworks to permit the government to confiscate cryptocurrencies derived from illicit activities since at least 2021, yet a clear framework has yet to be established.
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Meanwhile, the Russian government has seized millions in cryptocurrency from illegal operations, occasionally involving law enforcement personnel. Unfortunately, the current laws do not specify how such funds should be allocated.
Central Bank Governor opposes crypto investment
The concept of a potential social crypto fund in Russia may parallel initiatives like a strategic reserve for Bitcoin (BTC), which currently aims to exclusively hold confiscated BTC.
However, the Governor of Russia’s central bank, Elvira Nabiullina, has formerly voiced strong opposition to the idea of the central bank investing in cryptocurrencies.
An excerpt from a fact sheet on the US Strategic Bitcoin Reserve.
“Investing in cryptocurrencies does not make sense for the Central Bank in terms of preserving value due to their extreme volatility,” Nabiullina reportedly stated in December 2024.
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