Russia Looks To Mirror US Approach in Handling Confiscated Crypto

Key Takeaways

• Russia is considering a national crypto reserve funded by confiscated assets.
• The government previously rejected a proposal to invest public funds in Bitcoin.
• The proposal mirrors the U.S., where Trump approved a similar crypto stockpile.

After rejecting the idea of a state-backed Bitcoin reserve, Russia is now exploring a different approach—one modeled on the United States’ latest strategy.

Instead of purchasing Bitcoin (BTC) with public funds, Russia plans to establish a national crypto stockpile using confiscated digital assets from criminal cases and law enforcement raids.    

Russia Eyes Confiscated Crypto Reserve

According to Evgeny Masharov , a member of the Russian Federation’s Public Chamber Commission for public examination of bills and regulatory acts, seized cryptocurrencies could be funneled into a special fund.

The revenue generated from this fund would then be allocated to social, environmental, and educational initiatives.

Masharov, emphasizing that these assets tend to appreciate over time, said that the cryptocurrency seized in criminal cases can be turned into a fund that will “work for the benefit of the state.”

Russia has embraced crypto in recent years, passing regulatory frameworks and facilitating cross-border trade with digital assets.

However, it previously declined a proposal to establish a national Bitcoin reserve, opting instead for a more cautious approach.

A Practical Alternative to a Bitcoin Reserve

The idea of using confiscated crypto addresses two major concerns.

First, it prevents seized assets from being auctioned or sold below market value. Second, it removes illicitly acquired property from circulation, reinforcing financial security.

While some initially saw a state-backed Bitcoin reserve as a bullish move for the market, major economies like Russia and Japan rejected the idea due to Bitcoin’s volatility.

Governments have been reluctant to invest public funds in an asset that can lose more than half its value during downturns.

A reserve built from confiscated crypto, however, offers a more balanced solution. It allows Russia to accumulate digital assets without exposing public funds to risk.

Following the U.S. Playbook

Russia’s plan mirrors a similar shift in the United States. While former President Donald Trump initially proposed a strategic Bitcoin reserve, the idea evolved into a crypto stockpile composed of seized assets.

Now, Russia appears to be following the same strategy.