Russia's Sberbank offers custody services for Russian crypto assets
Russia's central bank has softened its opposition to cryptocurrencies, backing a law last year that let businesses use them in international trade to help skirt Western sanctions imposed on Russia over its conflict in Ukraine.
Anatoly Pronin, executive director of Sberbank's alternative payment solutions division, said the bank had sent proposals to the central bank on the regulation of crypto assets in the country after seeing more and more banks elsewhere start to provide custody services.
Speaking at a discussion on cryptocurrency regulation Pronin said Sberbank's proposals would see cryptocurrency assets regulated in a similar way to assets in bank accounts, and that the bank would guarantee tokens' safety.
Safeguarding crypto assets on behalf of clients means they could be frozen if law enforcement authorities suspect wrongdoing but can make the practice of carrying out transactions easier and protect accounts from hacking.
Gleb Zemskoy, director of the development of blockchain technology and digital currencies at Insight Finance, said no fund or crypto user could do without custody services.
"The custodian is the backbone of the world's economy in terms of cryptocurrencies," Zemskoy said. "And at the moment, it is in the hands of private foreign companies, which indicates a huge risk."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
35 minutes ago
- The Independent
Reeves ‘eyes £5bn windfall from sale of seized cryptocurrency'
Rachel Reeves is eyeing up a £5bn pre-Budget windfall as the government considers selling off seized cryptocurrency to plug a hole in the public finances. The Home Office is reportedly working with police forces to offload at least £5bn worth of Bitcoin and other currencies taken from criminals. It is planning to develop a storage system for the currencies to handle their sale, it has emerged, as concerns about Labour's spending plans mount ahead of the autumn Budget. Home Office plans for a 'crypto storage and realisation framework' would allow law enforcement to securely store frozen digital currencies and sell them, The Sunday Telegraph reported. Ms Reeves has been left with a gap of at least £5bn to fill when she sets out the government's spending plans this autumn, with the government's chaotic U-turn on planned benefit cuts raising the likelihood of tax hikes. The chancellor and Sir Keir Starmer have left the door open to a wealth tax to cover the shortfall. As well as the £5bn black hole left by the welfare climbdown, the impact of sluggish economic growth and Donald Trump 's trade war could leave the Treasury scrambling to find as much as £20bn in tax hikes or spending cuts elsewhere. It is not known how much cryptocurrency law enforcement agencies currently have, but one 2018 raid saw 61,000 Bitcoin seized from a Chinese Ponzi scheme. The value of Bitcoin has surged since Mr Trump's return to the White House, meaning the haul could be worth more than £5.4bn. Responding to the suggestion Ms Reeves could sell the reserves, Reform UK chairman Zia Yusuf said: 'This would be a terrible decision. The UK should be implementing Reform's Crypto Bill and increasing its Bitcoin reserves. 'Selling now will go down as a far worse decision than Gordon Brown's fire sale of our gold. 'The Westminster class are dinosaurs who don't get the future.' But Aidan Larkin, the chief executive of seizure company Asset Reality, told The Sunday Telegraph: 'There is oil under our feet in terms of digital assets, from an illicit perspective, that could have hundreds of millions of pounds coming back into the UK each year.' Bitcoin investors have been spurred on by Mr Trump, who has lent his support to the market both by promising new legislation and regulatory changes, but also even launching his own digital currencies. The leading cryptocurrency reached $120,000, marking both an all-time high and an important landmark for those who believe that bitcoin is undervalued.
Daily Mail
3 hours ago
- Daily Mail
Could Bitcoin help Rachel Reeves fill the black hole in UK finances? Chancellor ‘could profit from £5bn sale' of seized criminal crypto cash
could use bitcoin worth more than £5billion confiscated from criminal gangs to help fund Labour's spending plans, it has been suggested. The Home Office and police forces are said to be working on a major seven-figure sale of crypto-currency seized from organised crime figures, with the Treasury hoping to benefit. There are also plans to develop a storage system that would allow the regular sale of confiscated crypto-currencies. It comes as the Chancellor is facing pressure not to raise taxes in her autumn budget, after Labour backbenchers nixed efforts to cut the cost of the welfare bill and watered down plans to means-test the winter fuel payment. The price of bitcoin hit an all-time high last week of £123,000 (92,0000), with the Telegraph reporting this would value a single stash of 61,000 taken from a Chinese Ponzi scheme by officials in 2018 at more than £5.4billion - far above its value at the time. Aidan Larkin, the chief executive of Asset Reality, said: 'There is oil under our feet in terms of digital assets, from an illicit perspective, that could have hundreds of millions of pounds coming back into the UK each year.' Ministers are increasingly seeing crypto-currency as a possible income stream. Earlier this month ministers revealed they plan to crack down on speculators who evade tax on their profits. Under new rules, holders of currencies such as Bitcoin, Ethereum or Dogecoin will face fines of £300 if they fail to provide personal details to crypto service providers they use to make sure they are paying the right amounts to HMRC. The Government expects the new rules, which are known as the Cryptoasset Reporting Framework and take effect from January, to raise up to £315 million by April 2030. Any service provider which fails to provide accurate details about transactions and tax reference numbers will also face fines. Reform UK has recently pledged to cut taxes on cryptocurrencies and set up a 'Bitcoin reserve' if elected. Party chairman Zia Yusuf told reporters in may that a Reform government would reduce capital gains tax on assets such as Bitcoin to 10 per cent as part of a raft of reforms to how cryptocurrencies are governed. Mr Yusuf, who does not own cryptocurrency, suggested the cut could generate up to £1 billion for the Treasury over a decade, saying it would encourage more use of such currency and encourage people to move their assets to the UK. Cryptocurrencies currently incur capital gains tax of either 18 per cent or 24 per cent, depending on the rate of income tax paid by the person selling the assets. Mr Yusuf also announced that Reform would allow people to pay tax in Bitcoin and establish a 'Bitcoin reserve fund' to 'diversify' the UK's reserve holdings.
Telegraph
19 hours ago
- Telegraph
Rachel Reeves eyes £5bn Bitcoin sale to help plug black hole
Rachel Reeves could be on the brink of a Bitcoin windfall worth billions as she battles to fill her budget black hole. The Home Office is working with police forces to sell off a hoard of seized cryptocurrency estimated to be worth at least £5bn in a move that could ease pressure on the beleaguered Chancellor. It plans to develop an official crypto storage system that would handle sales of Bitcoin and other digital currencies. The potential sell-off comes amid growing concerns about a black hole in the public finances, following Sir Keir Starmer's about-turns on welfare and the winter fuel allowance. Economists believe the Chancellor must find as much as £20bn in the autumn as she struggles to balance the books in the face of higher borrowing costs and weak growth. Stubborn inflation figures have threatened to keep interest rates high, raising the cost of borrowing. Ministers have indicated that taxes will have to rise to fill a budget black hole. Cryptocurrency sales are handled by law enforcement agencies, but the Treasury is understood to be monitoring the situation. A recent rise in the price of digital currencies promises to multiply the already significant sums involved. The total amount of seized cryptocurrency currently held by police is unknown. But a single raid in 2018 recovered 61,000 Bitcoin from the proceeds of a Chinese Ponzi scheme being stashed in Britain. Bitcoin's value hit $123,000 (£92,000) last week, making the stash worth more than £5.4bn, up 20-fold from its value when seized. Prices have surged as Donald Trump has ushered in a series of changes in the US to broaden access to and adoption of cryptocurrencies. Lawmakers in the US passed the country's first major national cryptocurrency legislation, known as the Genius Act, on Friday. Nigel Farage, the leader of Reform UK, has called for Britain to establish a national Bitcoin reserve, an idea that has been rejected by Labour. Home Office plans for a 'crypto storage and realisation framework' would allow law enforcement to securely store frozen digital currencies and sell them. It is unclear how much would accrue to the Treasury from any sales. However, in many criminal seizures the Treasury takes a substantial portion of the proceeds if sums cannot be returned to victims. In the case of the 2018 raid, Chinese victims of the investment fraud have asked for the Bitcoin to be returned. The public purse is in dire need of extra revenue as growth falters. Last week Richard Hughes, the chairman of the Office for Budget Responsibility, suggested higher taxes would not be enough to address a looming debt crisis. Experts said crypto seizures represented a potentially lucrative avenue for raising funds. 'There is oil under our feet in terms of digital assets, from an illicit perspective, that could have hundreds of millions of pounds coming back into the UK each year,' said Aidan Larkin, the chief executive of seizure company Asset Reality. Cryptocurrencies are increasingly used to evade financial controls and carry out investment scams, making them a key target for police seeking to stop criminal activity. Law enforcement agencies have sold Bitcoin seized from criminals in the past, but plans for a centralised system suggests ministers recognise the growing significance of cryptocurrency as a potential revenue source. Last week, the US Marshals Service said it had more than $3.4bn in seized Bitcoin. The Trump administration has vowed to create a strategic reserve using the cryptocurrencies. Tender documents from BlueLight Commercial, the Home Office's procurement body for law enforcement, said the contract would be worth up to £40m. The provider would be paid a commission based on cryptocurrency sales. The project's future is unclear after an updated notice said it had not received acceptable bids, although it is expected to continue in some form. Proceeds of crime that are not returned to victims are split between central government accounts and a pot for law enforcement programmes. The decision to sell Bitcoin is ultimately made by crime-fighting agencies. Bitcoin's price has doubled in the last year on the prospects of the Trump administration treating the digital currency favourably in contrast to a series of investigations launched by the Biden White House. Speaking in Las Vegas in May, Mr Farage said that he would establish a UK Bitcoin reserve if he was made prime minister as part of a plan for a cryptocurrency 'revolution'. Labour has rejected the idea, saying it is too volatile to store sovereign funds in. Analysis | Britain is sitting on billions in Bitcoin. Can it rescue Reeves? Selling crypto may offer a quick fix for the cash-strapped Chancellor – but it risks repeating a historic mistake Gordon Brown's decision to sell the majority of Britain's gold reserves in 1999 has been dubbed by some as one of the worst investment decisions ever made by the government. The 401 tonnes of gold the former chancellor sold at the market's nadir brought in $3.5bn, far from the $40bn it would be worth today. A quarter of a century later, one of Brown's successors is sitting on a potentially similarly sized goldmine of the digital variety, as well as another potentially perilous selling decision. Britain's Bitcoin stockpile, confiscated from various criminal enterprises, is today estimated in the billions, a development that has led to calls for Rachel Reeves to cash in to ease pressure on the public finances. The value of these holdings has soared after the price of Bitcoin recently hit a record high above $123,000 – double its level a year ago. While there is no estimate of the amount of cryptocurrency seized from criminals, a single raid in 2018 recovered a wallet containing 61,000 Bitcoin from Jian Wen, a takeaway worker who was jailed last year for money laundering. At the time of the raid, Bitcoin was worth around $6,000, with the total haul more than £300m. Today, it is worth more than £5.4bn according to Arkham Intelligence, a company that analyses cryptocurrency transactions. Last week, the US Marshals Service, an arm of the Department of Justice, said it had around $3.4bn in Bitcoin, although experts have said the US government's total haul is likely to be much higher. Publicly, the Treasury says it does not hold any Bitcoin. The proceeds of crime such as investment scams are managed by police and are first meant to be returned to victims. But this is often not possible and in reality 20 to 30pc is kept, says Aidan Larkin, the chief executive of Asset Reality, a company that specialises in seizing the proceeds of crime. Cryptocurrency prices fluctuate wildly and seizures are handled by local forces, making it impossible to know how much has been seized. But Larkin is adamant that the Treasury is in line for a potential windfall. 'If I'm in the Treasury, I'm thinking of this as our Norway oil moment. I do think digital assets will lead to a large windfall for government agencies and the public purse over the next five to 10 years,' Larkin says. Making crime pay Since 2019, £1.4bn has been seized and frozen from the proceeds of crime. 'We could double that by having a greater focus on digital assets,' Larkin says. Under current legislation, the proceeds of crime that are not returned to victims are split between frontline police agencies and the central government. Bitcoin's growing value has led to suggestions that Reeves should sell what Bitcoin she can, with Norman Lamont, the former chancellor, saying she should spend it 'right away'. However, in reality, selling crypto is more difficult than seizing it and untangling crypto-related crimes can take years. In the case of Jian Wen, victims of fraud have asked for their money back. The Home Office did not provide any update on the case. 'With the delays in court hearings that we're getting now, you have to seize it and then maintain it for a long time,' says Professor Michael Levi of Cardiff University, an expert on asset seizures. However, there are signs that the Government is taking steps to offload Bitcoin. A branch of the Home Office has sought bids for a 'crypto storage and realisation framework' that would centralise and organise the sale of various cryptocurrency seizures. The provider would earn up to £40m in commission when cryptocurrencies are sold, indicating that at least hundreds of millions of pounds worth are earmarked to be sold. If the Government were to confiscate the proceeds of Jian Wen's Bitcoin seizure, it could boost the Treasury's coffers by around £2.6bn, roughly half the cost of Sir Keir Starmer's recent benefits climbdown or a third of the cost of the Afghan data breach revealed last week. While the decision is meant to be taken by law enforcement, the sums at stake – and Bitcoin's famous volatility – suggest the Chancellor would take an interest. The Treasury is understood to be keeping tabs on the potential for a cryptocurrency windfall. A quick-fire sell-off could lead to accusations of selling too early, especially given Bitcoin's blistering rise over recent years. Nigel Farage, the leader of Reform UK, has said he would establish a Bitcoin reserve if made prime minister, following in the footsteps of ally Donald Trump, who has already ordered officials to create a reserve from seized cryptocurrency. Labour has recently turned down the idea, with Emma Reynolds, the Economic Secretary, saying that Bitcoin's volatility makes it 'less suitable as a reserve asset for the UK'. Yet, the strain on the public purse suggests Reeves could do with the money now.
