A landmark ruling by Russia's Constitutional Court has established that cryptocurrencies are subject to property laws, delivering a significant legal victory for digital asset holders. The court's decision, which will have far-reaching consequences for civil disputes and criminal cases, came in response to a civil lawsuit filed by Moscow resident Dmitry Timchenko.
Timchenko's case centered on a loan of 1,000 USDT made in 2023 to an unidentified borrower who failed to return the funds. After lower courts dismissed his claim, arguing that Russia's digital financial asset legislation did not cover stablecoins, Timchenko appealed to the Constitutional Court. His legal team successfully argued that the prior judgments violated his constitutional property rights, asserting that "no other form of property in Russia is subject to such limitations."
The court's ruling clarifies that failure to report crypto holdings to tax authorities—an obligation that only applies to miners—does not negate an owner's property rights, provided the assets were obtained legally. Legal expert Ignat Likhunov noted that "It sets a precedent for future [police and court] investigations" involving stolen digital assets.
In a related and immediate application of this legal principle, the Russian judiciary has confiscated cryptocurrency from a father in Krasnodar Krai to settle over 1.7 million rubles (approximately $22,000) in overdue child support payments. This marks the first known instance in the region where a debt has been fully covered using seized digital assets. The Federal Bailiff Service (FBS) executed the seizure from a brokerage account, citing its authority under the law "On Enforcement Proceedings."
These developments occur as Russia prepares sweeping changes to crypto regulation in the first half of 2026. A government bill recognizing the property nature of crypto for seizure purposes was submitted last spring, following the FBS's exploration of methods to convert seized crypto into state revenue. The Bank of Russia has also proposed recognizing assets like Bitcoin as "currency assets" in a new regulatory concept.
