Russia Considering Draconian Rules for Illegal Crypto Operations

Randolph French

ByRandolph French

May 24, 2020

Harsh new rules making many uses of digital assets punishable with fines or prison might soon become law in Russia. 
New draft bills setting out how Russia should regulate cryptocurrencies were sent to the country’s parliament, the State Duma, earlier this week. Although the official website for the planned legislation hasn’t been updated yet, the two documents have been published in the OrderCom Telegram channel and were confirmed as genuine by sources of Russian news outlet RBK. 
The legislative proposals were reportedly written by staff at the Digital Economy think tank and the Skolkovo business accelerator. They seek a new version of the bill on digital assets, which has been stuck in the Duma for more two years now, as well as crypto-focused additions to the country’s criminal code.
The first draft bill would regulate digital currencies in Russia. Or, to be more clear, prohibit the issuance of, and operations with, digital currencies in the nation. Even distributing information about such activities would be banned.
Individuals and companies would not be permitted to accept digital currencies as payment, except if they are inherited, distributed to the debtors of a bankrupt company or confiscated as a result of a court decision. People owning cryptocurrency should declare it at the tax agency, as well as provide information on how it was purchased.
The second draft would introduce a new article into the criminal code bringing sanctions for illegal operations with digital assets.
If passed, issuing digital assets in Russia without being approved for listing on a yet-to-be created register at the country’s central bank would see a company fined for up to two million rubles (nearly $28,000). The same level of penalty is suggested for organizing operations with digital assets and cryptocurrencies without approval, while individuals would face a fine of up to $2,800.
Buying crypto for cash or via a bank transfer from a Russian bank would be subject to a fine up to one million Russian rubles ($14,000) or up to seven years in prison, depending on the scale of the deal. Similar punishment would be in store for those who accept crypto for goods and services.
If such a business brings “especially large” profit or especially large damage to the citizens and the state, the proposal would put the person(s) involved behind bars for up to seven years, or even forced labor. Facilitating crypto purchases, if such operations somehow “brought significant damage” to the state or individuals or “especially large profit” to the operator, could lead to five years in prison.
The mentions of a central bank register suggests legislators are providing leeway for some officially sanctioned entities to issue and use digital assets, while most general operations would be banned.
According to the RBK report, Anatoly Aksakov, chief of the Duma Committee on Financial Markets, confirmed the authenticity of the documents, but said they had not been finalized.
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Randolph French

By Randolph French

I have been writing about Cryptocurrency for over 5 years and I have seen it grow from a niche interest to a global phenomenon. I have written two books on the subject, “Crypto investing for beginners” and “Crypto trading for beginners”. My work has been featured in major publications such as Forbes, Wall Street Journal and Time Magazine. I am a thought leader in the space and my insights are highly sought after by both media and industry players. I am a regular contributor to CNBC, Bloomberg and CoinDesk. I also advise startups in the space and have mentored many successful entrepreneurs.

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