Bills that may deem cryptocurrencies illegal in Russia – if they enter into force – have been tabled by a group of deputies to the parliament of the country, the Duma. According to a report published by local news broadcast RBC on Thursday, leaked documents propose to punish crypto users with heavy fines or even up to seven years’ imprisonment.
According to the report, the draft laws – which first surfaced in the Telegram channel “OrderCom” and were later confirmed to be authentic – were forwarded to the Russian Ministry of Economic Development earlier this week.
One of the bills is intended to ban the issue and all transactions with cryptocurrencies in the territory of Russia, while individuals and companies should not accept crypto as a form of payment. People who already own cryptocurrencies should register them with the tax authorities and explain how their cryptos were obtained.
Another concept proposes adding new sections to the country’s criminal law for illegal operations using digital means. For example, if the bill is passed, companies that issue or manage digital assets “using sites registered in Russia or technical equipment in Russia” could be fined up to two million rubles ($ 27,800) if not approved by a special register with the central bank of Russia. Individuals would be fined up to 500,000 rubles (about $ 7,000).
In addition, because of violation of the rules for cryptocurrency transactions, when used as payment for goods or services, companies should pay as many as one million rubles ($ 13,900) individuals – up to 200,000 rubles ($ 2,800).
The same charge, but “if major or particularly great damage has been done to citizens, organizations or the state, or if these actions have led to large or particularly large-scale enrichment,” it could result in fines of up to a million rubles ($ 13,900. )), imprisonment of up to seven years or imprisonment of up to five years.
“Cryptocurrency purchases in Russia for cash or by bank transfer opened with Russian banks” are also punishable under the proposed laws.
The end of all crypto in Russia – or not?
Dmitry Kirillov, senior tax attorney at Bryan Cave Leighton Paisner and a lecturer at Moscow Digital School, said that if these proposals are approved and take effect in their current form, it will spell the end of any cryptocurrency circulation in Russia. As a property, crypto loses value because it cannot be sold. “Mining or exchanging 3.5 bitcoins leads to criminal liability,” he added.
Kirillov confirmed that individuals, including private entrepreneurs and legal entities, will not have the right to conduct digital currency transactions, for example, to accept them as payment for goods or services.
“People who currently own cryptocurrencies will be forced to get rid of them before the law comes into effect or risk” going underground “. Targets achieved in this way are the opposite of what is stated. In general, the idea of dropping an ‘Iron Curtain’ crypto does not, in my opinion, contribute to business development or Russia’s interaction with the global economy on a digital level, ‘Kirillov explained.
The expert added that he is confident that such laws – at least in their current iteration – will destroy the Russian crypto industry.
To talk with DecryptSergey Mendeleev, a former delegate from Moscow’s Yasenevo municipal district and founder of the Bitcoin exchange platform Garantex, echoed this sentiment, calling the proposal “a total ban on cryptocurrencies in Russia.”
At the same time, he suggested that the chances of these new crypto proposals actually taking effect are slim.
Some signs suggest that the law will not be passed. The bill was drafted in 2018 by the Ministry of Finance. Had it been introduced on behalf of the government, it would almost certainly have been adopted. The State Duma approves almost all bills. Instead, it was presented to the State Duma by a group of deputies, which means that the law has not gone through the government approval process because of serious opposition to the bill, “Mendeleev said. Decrypt.
He also noted that the proposal was written by just a few obscure authors, while “most of the time, everyone wants to participate in an accurate project.”
The bill was first read in the spring of 2018. A year later they tried to revive it, but to no avail. Nothing has changed since then. Accidental leakage of an internal document doesn’t mean anything in my opinion, ”Mendeleev concluded.