Judicial Protection for Crypto Assets Ensured by Landmark Ruling
A ruling by the constitutional court in Russia will ensure that property claims to cryptocurrencies are protected by the country’s judiciary. This decision has various implications for crypto holders, the most important of which is that Russian law now treats digital coins like other assets.
Russia’s Top Court Rules in Favor of Cryptocurrency Owner
The Constitutional Court of the Russian Federation (CC) has upheld the right of cryptocurrency owners to receive adequate judicial protection, local media reported. The review was prompted by the case of a Russian citizen who sought the return of 1,000 Tether (USDT) he had acquired and transferred to an acquaintance for management purposes.
Lawyers for the man, identified as D.I. Timchenko, filed a complaint after lower courts declined to review his request, based on his failure to notify the Federal Tax Service (FNS) of his ownership of the coins. According to the Right Side law firm, hired by the crypto investor, the cited article from the federal law “On Digital Financial Assets,” which obliges him to do so, is unconstitutional. The main argument is that it makes the right to judicial protection conditional, as it can only be exercised after a formal notification. What’s more, a procedure for the latter hasn’t been established yet.
Marat Amanliev, the attorney who represented the plaintiff, announced that the provision has been declared invalid, the business news portal RBC reported on Tuesday. The ownership rights of digital currency owners are now equal to the rights over any other property, the legal expert highlighted. What’s more, the right to judicial protection will not be tied to any notification or registration procedure, he noted.
“Despite the fact that absolutely all other parties to the process opposed our position — the State Duma, the Federation Council, the Central Bank, presidential and government representatives, Rosfinmonitoring, and the Prosecutor General’s Office — we were able to convey the essence of our position to the Constitutional Court.”
However, there is a major exception. The ruling applies only to cryptocurrencies obtained by legal means from sources other than mining. According to the court, the contested article continues to apply to the cryptocurrency produced by miners and operators of mining infrastructure. For this category, reporting crypto holdings to the tax authority remains mandatory, as the respective procedure is already enshrined in law.
Russia legalized the mining of Bitcoin and the like in late 2024, making it its first properly regulated crypto-related activity. Legal entities and individual entrepreneurs are allowed to participate in the industry, as long as they register with the FNS, inform it about the coins they have minted, and pay their taxes.
Implications for Russia’s Crypto Community
Marat Amanliev further emphasized that all claims by digital currency owners that have been dismissed for failing to notify government agencies of ownership will now be reviewed again. The Constitutional Court, whose main role is to determine if legal acts and decrees comply with the country’s fundamental law, also stated that Russian legislation must classify all types of digital assets, taking into account their specifics, the lawyer added.
Russia is preparing to do precisely that this year, after, at the end of December, its central bank proposed a new regulatory concept that lawmakers are expected to adopt by July 1, 2026. The regulator’s plan is to define cryptocurrencies and stablecoins as “monetary assets.” Until now, they have only been recognized as property, mainly for the purposes of criminal proceedings.
The CC expanded on this, reasoning that despite its virtual nature, coins have economic value, can be circulated, and are recognized as property under the Russian Tax Code, too. This means that the rights arising from their ownership are protected by at least two articles of the main law: “on private property” and “on judicial protection.”
With the court’s decision, digital currency becomes a “full-fledged object of law,” pointed out Ignat Likhunov, founder of Cartesius, a law firm that specializes in providing legal advice in the crypto space. He also highlighted the ruling’s significance not just for civil disputes over crypto assets obtained through purchase, exchange, or receipt, but also for criminal cases involving theft. The high court has instructed lawmakers to make the necessary amendments to ensure that the constitutional rights of crypto owners are protected, provided they can prove the origin of the funds.