Key Takeaways
- Russian courts are rejecting crypto-related claims if the assets weren’t declared to the tax authorities.
- Legal experts say this violates citizens’ rights and leaves them no path to judicial protection.
- A lawyer has challenged the rule in the Constitutional Court, citing a lack of clear procedure.
Russian citizens are facing a new hurdle when it comes to protecting their crypto rights in court: they must first declare their digital assets to the Federal Tax Service (FTS).
Without that declaration, courts are rejecting their claims—a move lawyers say violates basic constitutional protections.
Russia’s New Crypto Tax Dilemma
According to Russian news outlet RBC, this stems from Part 6 of Article 14 of the Federal Law “On Digital Financial Assets.”
It states that courts may only consider crypto disputes if the claimant has reported their wallet and transactions to the FTS.
However, there’s a catch: no official procedure for this notification has been approved yet.
Lawyer Marat Amanliev has filed a complaint with the Constitutional Court after a client’s claims were dismissed for this very reason.
He argues that the current law effectively blocks access to justice and violates constitutional protections.
“Consequently, compliance with such a requirement is impossible, which makes it impossible to exercise the right to judicial protection,” Amanliev said.
“It should be noted that the right to judicial protection cannot be limited under any circumstances. Compliance with this requirement is impossible, effectively depriving cryptocurrency owners of the right to protection,” he noted.
The lawyer argued that, unlike with property such as real estate or vehicles, where citizens can still defend their rights even without prior state notification, crypto holders are being denied that same protection.
Regulation or Roadblock?
Russia embraced crypto more formally in 2024, legalizing mining and cross-border payments, and rolling out a tax framework.
However, implementation has been bumpy. For instance, mining was later banned in certain energy-deficient regions, revealing cracks in the policy.
A similar contradiction is now surfacing with taxation. Lawyers argue that requiring notification before granting legal rights, without providing a method to comply, is unconstitutional.
The heart of the issue lies in the difference between declaring ownership and filing taxes.
As Amanliev notes, the dispute isn’t about unpaid tax, it’s about being barred from even making a legal claim because there’s no approved way to report crypto holdings.
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Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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