Russia to limit crowdfunding investments

There will be a limit on how much Russians can invest in crowdfunding projects: no more than RUR 600K ($9K) per year. A relevant draft law is being prepared for the second reading at the Russian State Duma.

According to the draft law, individuals will be able to invest up to RUR 100K in one crowdfunding project. The total investments per year can be no more that RUR 600K ($9K), RBC news agency reports. The draft law does not introduce limits for social and charity campaigns; the limitations will apply to individuals investing money in commercial projects.

The document was adopted by the State Duma in the first reading in the spring 2018. One of the authors of the law, Chair of the State Duma Committee for Financial Markets Anatoly Aksakov said that the second reading might take place in January 2019, prior to which amendments will be made to the draft law. The draft law defines investors as citizens who own assets worth over RUR 6 mln ($90K) with an experience in working in companies that deal with securities. An investor should trade securities at least ten times every three months.

RI Group Managing Partner Alexander Orekhov told Invest Foresight that it is not quite obvious who is supposed to be protected by the draft law. According to the expert, in general, participants in traditional (not involving cryptocurrency) crowdfunding projects invest a lot less than RUR 600K.

“According to the website, users spend some RUR 1.5K ($22) to support crowdfunding campaigns. At the same time, large investors invest money in such projects via unofficial channels. So the new law will not affect them anyway,” the expert said.

According to Orekhov, it is more difficult to regulate the process on the cryptocurrency investment market and to protect its participants. According to Orekhov, investments in such projects are not in the Russian jurisdiction; he believes that it have been be more important to work on improving the population’s financial literacy in order to protect people from another Cashbery scheme.

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