Cryptocurrency as the Preferred Method for Illicit Fund Conversion
A significant portion of the money stolen by Russian cybercriminals is being converted into cryptocurrencies, according to a representative of a public institution that advises the government in Moscow on new laws and regulations. Evgeny Masharov, a member of the Commission for Public Review of Bills and Regulatory Acts, emphasized the need for law enforcement to be able to confiscate digital coins, even in the absence of specific legislation. This assertion is contributing to the growing momentum for the adoption of a comprehensive framework for digital assets.
The largest share of funds illicitly obtained by individuals involved in cybercrime is laundered through conversion into cryptocurrency. This observation comes from Evgeny Masharov, who serves as a member of the Commission for Public Review of Bills and Regulatory Acts at the Civic Chamber of the Russian Federation, an institution representing Russia’s civil society.
Speaking to the TASS news agency, Masharov noted that while schemes involving the sale and rental of property like homes and cars have seen a reported surge, telephone fraud remains the most prevalent method of theft among scammers.
Moreover, two-thirds of funds obtained by defrauding citizens are laundered through conversion into cryptocurrency.
Masharov also pointed out that the measures introduced by authorities, including the establishment of criminal liability for "droppers" (a Russian slang term for money mules), are compelling fraudsters to adopt more insidious methods and recruit a larger number of individuals, as evidenced by the appeals received by the Chamber.
Criminal groups are now posting advertisements to hire "couriers." Victims transfer their funds to these couriers, and subsequently, the organizers of these schemes exchange the fiat money through crypto exchange offices before transferring the coins to their own wallets.
Masharov commented on the situation, stating:
Considering that we have no legislation regulating cryptocurrencies, the turnover of crypto exchangers can only be assessed by their actual beneficiaries. Only the lazy don’t know about the crypto exchangers operating in Moscow City.
He was referring to cryptocurrency trading platforms that operate within the Moscow City business center in the Russian capital. Earlier this year, some of these firms' offices were subject to police raids, although they were later permitted to resume operations.
Russia Developing Tools for Crypto Seizure Amidst Regulatory Gaps
Evgeny Masharov indicated that Russian law enforcement agencies are expected to soon possess a tool that will enable them to seize digital assets and wallets, despite the current lack of a legal definition for cryptocurrency. However, he cautioned that without proper regulation, identifying the individuals behind criminal organizations will remain a challenge.
Masharov believes that the Federal Security Service (FSB) should be involved in resolving crypto-related crimes, as cryptocurrency has become "highly criminalized ahead of its legalization." Russia’s primary security agency is already participating in operations targeting illegal crypto miners.
A draft law currently advancing in the State Duma, the lower house of the Russian parliament, is anticipated to regulate the seizure of cryptocurrencies by the state. This proposed legislation includes a mechanism for coin confiscation and will allow Russian authorities to seek assistance from foreign exchanges.
Russia has yet to comprehensively regulate its crypto market, including investments, with mining being the only currently legalized crypto-related activity. Recent statements from officials in Moscow, including representatives from the Central Bank of Russia, suggest that broader regulation is likely to occur in 2026.
In November, Russia’s Ministry of Interior identified crypto investment offers as among the favorite lures used by Russian fraudsters this year. In October, Masharov proposed introducing criminal liability for certain crypto transactions, an idea that drew comparisons to the currency restrictions of the Soviet era among many Russians.