The Association of Banks of Russia called on lawmakers to introduce criminal liability for storing cryptocurrencies outside centralized exchanges on non-custodial wallets. This was reported by the news agency Izvestia.
While funds on custodial wallets are de facto controlled by exchange operators (similar to bank deposits), on non-custodial wallets digital assets and keys are under the personal control of the user. And it is the user, not the exchange, who is responsible for their safety.
In essence, this allows investors to “be their own bank,” gaining full control over their cryptocurrency.
According to Anatoly Kozlachkov, vice president of the association, the association has developed a foreclosure mechanism for cryptocurrency stored in non-custodial wallets.
The system developed jointly with the Ministry of Internal Affairs aims to introduce criminal liability for failure to store cryptocurrencies on centralized wallets if it has not been declared. Criminal liability will be imposed not for the mere possession of such wallets, but for the refusal to provide the keys to the authorized bodies.
The association also acknowledged that their proposal is complicated by technical issues that have to do with the anonymity of the owners.
However, Anatoly Kozlachkov said that law enforcement agencies have long resorted to the services of special companies that can trace the chain of transactions in the blockchain and thus establish the ownership of cryptoassets by specific persons and the connection with illegal actions.
The Ministry of Finance of the Russian Federation said it was ready to consider the initiative in due course.