To achieve said objective, Russia must define a legal concept of cryptocurrency

Recently, a group of cybercriminals posed as the Russian criminal group Fancy Bear to launch DDoS attacks against companies of the financial sector. These attacks are aimed at international companies. Criminals demand that victims pay a ransom in bitcoins and only one bitcoin costs about USD 9,300.

This group research all about its victims. According to what the recent attacks show, the group is going after back-end-servers, which are not usually protected by DDoS mitigation systems. In this way, criminals have a good chance of causing system downtime.

For this reason, Russian authorities are seeking legal means to confiscate virtual assets such as cryptocurrencies stolen by criminals. Currently, Russian authorities can confiscate traditional forms of property. But the idea is to be able to do the same with the new form of money like cryptocurrencies.

In this sense, the Ministry of Internal Affairs of Russia is studying how to develop legislation to allow law agencies to force criminals and obtain the assets they stole and also obtain, this way, digital gains, according to what local media reported.

Difficulties to Face

But there is one aspect that must be clear to achieve this objective. Russia must define basic concepts such as what is a cryptocurrency. Defines it as commodities or as cash-equivalent is needed in order to implement the idea and use the stolen funds.

The problem is that the process of regulation and definition of cryptocurrencies in the Russia parliament has been very slow. This is something that complicates the issue.

Among other potential problems are some characteristics associated with the means to stole cryptoactives. Crypto-criminals have different types of wallets protected by passwords and encryption. Regulators are aware of these difficulties and work in how to solve this aspect.

Until now, Russian authorities consider they may be able to work with exchanges to isolate and then “freeze” the stolen funds. Nikita Kulikov, who is a member of the State Duma’s expert council and Founder of PravoRobotov Autonomous Non-Profit Organization, explained that aspect.

To use the money, agencies may have to develop their own crypto wallets and find ways to exchange digital assets into fiat currencies.

“For these purposes, they (authorities) can create a state crypto-exchange and crypto-ruble with a stable rate in which they will store the withdrawn funds”, Kulikov commented.

Russia is accepting to work with cryptocurrencies as a means of payment but it does not consider launching its crypto assets until now; although law enforcement moves to become acquainted with cryptocurrency.

Currently, Russia’s central bank is maintaining indifference with respect to the emission of a national cryptocurrency. Last October, Elvira Nabiullina, Chairwoman of the Ban of Russia, said she saw no pressing reasons to launch a digital ruble following the results of internal research they made.

Fancy Bear is known for its attack of the Democratic National Committee during the 2016 election. Also, the plan of the group of criminals was to obtain data from the Military Industry of Spain, which contains information about 50,000 people.

The group operates through infected emails to affect users. Now, the money that this and other groups steal could be recovered by Russia. More information about the progress of the proposal is expected.

By María Rodríguez


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