The Russian government is building a framework for converting seized Bitcoins (BTCs) into money to be used by the Treasury, as it struggles with the regulatory uncertainties surrounding cryptocurrency assets.
This effort is led by the Federal Bailiff Service. It follows the seizure of BTC 10032 from former investigator Marat Tabiev. The BTC was valued at approximately $10 million. It marked a significant test case for Russia’s evolving crypto policy.
Dmitry Aristov, the FSSP’s chief and a RuTube Channel of Federation Council channel, said that Russia was using this precedent as a basis to investigate mechanisms for converting confiscated digital currency into revenue.
A comprehensive legislative solution has not yet been found.
FSSP is preparing a crypto sale
Dmitry Aristov addressed the Federation Council’s Committee on Constitutional Legislation and State Building. He described Bitcoin as a “problematic asset” for law enforcement.
He confirmed bailiffs confiscated BTC at least in one criminal case, and that they are working with state agencies to turn the coins into funds held by state.
Aristov reportedly cited the Tambiev court case in support of his legal argument.
In the course of their investigation, the law enforcement confiscated BTCs belonging to the former investigator who had been found guilty for accepting cryptocurrency bribes by members of Infraud Organization, a hacker collective. Tambiev received a 16-year prison sentence.
Aristov stated that a framework of consistent seizures and conversions is not possible until the passage of a law defining Bitcoin’s legal status and those of other coins.
Tambiev Case Sets precedent
Marat Tambiev’s case has been a turning point for Russian law enforcement and legal authorities.
He was found guilty in 2024 of receiving bribes from an international group that engages in cybercrime in Bitcoin in return for obstruction of a criminal investigation.
The FSSP seized BTC 1 032 from Tambiev. This is worth around $10 million and makes it the biggest crypto seizure by a Russian government body.
After the BTC was confiscated, the Russian Treasury started working to monetise it.
The authorities announced in January 2025 that they have begun transferring crypto to state-owned accounts, and plan to start selling them.
Civic Chamber also has weighed in and proposed a new fund for managing cryptoassets confiscated.
The Chamber suggested that the proceeds of the digital currency sales be used to finance public projects. This would further tie the requirement for clarity in legislation to wider economic and social objectives.
Crypto policy remains divided
The country has a conflicting view on digital assets despite two important pieces of legislation that were passed in 2024. One recognised crypto mining as an official business and the other allowed crypto to be traded internationally within a Central Bank run sandbox.
The Russian law prohibits payment by cryptocurrencies.
Central Bank of India continues to push for tighter controls. It has proposed a ban on cryptocurrency exchanges and retail investment in crypto.
Other ministries, however, and the major mining companies favor regulation rather than prohibition. The argument is for an open-minded approach that allows regulated cryptocurrency exchanges, and for clearer legal standards.
This results in a gridlock of policy that makes it difficult to enforce laws like the FSSP.
Sandbox and crypto fund plans
It is clear that the Civic Chamber has proposed a centralised cryptocurrency fund to be used for confiscated digital assets. This indicates a move towards institutionalising the management of digital assets in the system of the state.
It would allow the formal redistribution to public benefit of cryptocurrency-derived revenues.
The Central Bank’s Sandbox allows qualified investors to continue to trade cryptocurrency in a limited environment.
This is a good first step, but a broader approach will be needed in order to help agencies such as the FSSP transform digital assets into tangible financial results.
As new information becomes available, this post Russian authorities now can convert Bitcoin into State funds might be updated.
This site is for entertainment only. Click here to read more
