Russia is planning strong steps on any unregistered activities in respect of cryptocurrencies. For this purpose, the Ministry of Internal Affairs seems to be intending to enforce criminal liability on any such operations. This comes at a time when there are questions raised about any existence of regulations in respect of transactions involving digital coins. At the same time, if anyone found to be using it for illegal activities, then such actions could attract actions from enforcement agencies.
Amendment to Legislation
The Interior Ministry is said to be creating an amendment of legislation of registered operations in respect of open source virtual assets like bitcoin, Ethereum and others. This meant that the ministry wants to bring in persons or entities to get a compulsory registration with state authorities who are conducting financial, as well as, tax regulation, cointelegraph reported. This is to ensure that transactions in cryptos are conducted only legally. Main Directorate for Drugs Control (GUKON) from the Interior ministry has initiated the process.
GUKON head, Andrey Khrapov, has sought the opinion of the Finance Ministry on July 13 and their stand on the possible realization of the planned legislative measures. However, the Ministry of Economic Development has indicated its skeptical stance on the initiative of the interior ministry. As far as the economic ministry is concerned, it is too early to think about bringing the cryptocurrency operations under the ambit of criminalization.
Similarly, the Economic Development Ministry’s deputy chief, Savva Shipov, indicated that there is no legislation as yet that refers to regulating transactions of virtual currency specifically. At the same time, he pointed out there is provision for prosecuting any individual or entities that are engaged in illegal activities with the help of a crypto coin. This included drug and arms trafficking. Apart from these, money laundering is one more thing that most of the nations are concerned about.
Sputnik DLT CEO and a legal expert, Artem Tolkachev, has supported the stand taken by the Economic Development ministry. He also believes that the time is not ripe to talk about the criminalization of unregistered operations of cryptocurrency. He too contended that there is no establishment of necessary legislation for the sector. He also pointed out that trading in virtual currency is termed as ‘grey zone’ in the country.
Referring to the latest initiatives impact, Tolkachev thinks that Russian-based firms would have to look for another jurisdiction on cryptos. Already, some of the crypto-associated enterprises have started working with foreign setups collaboration or alliance. In January, the finance ministry introduced regulatory guidelines for both blockchains, as well as, cryptocurrency. Until now, the bill entitled as “On Digital Financial Assets” has passed only the first of the three readings in the State Duma.
The legal expert commented, “If such initiatives as the criminalization of cryptocurrency will gain force in the future, this will have a negative impact on real projects, that will, as a result, look for another jurisdiction. In fact, large crypto operators are not working through Russian structures already, operating through foreign setups instead.”