Russia to restrict bitcoin transactions

Finance Ministry in Russia has initiated amendments to the law on digital financial assets and a ban on deals with cryptocurrencies. In addition to limiting transactions with bitcoins and altcoins, the initiative bars miners from receiving digital currencies legally.

In case the amendments are approved, users will only be permitted to make deals with cryptocurrencies in three instances, namely, in cases of bankruptcy, inheritance, and enforcement proceedings.

Any unlawful dealings with cryptocurrencies will be both fined and criminally punishable. Individuals may be fined RUR 100K ($1.3K) or imprisoned (for up to seven years). Entities will be fined RUR 1 mio. The draft does not prohibit mining digital currencies yet bans paying for mining in cryptocurrencies. Therefore, mining cryptocurrencies will make no sense, and in case the draft is passed, cryptocurrency business in Russia will die.

Last May, Russia’s State Duma (Lower House of the Parliament) came up with some legislative initiatives on cryptocurrencies. The drafts triggered criticism of the public while experts claimed the legislative proposals may stall blockchain development in Russia. Ultimately, the draft law on digital financial assets was adjusted.

As Invest Foresight reported, in view of Artem Genkin, expert in the theory of money and financial innovation, Doctor of Economics, Professor, and President of the Center for Protection of Depositors and Investors autonomous non-profit organization, “not all of the effective cryptocurrency instruments have been covered in the current act. The current law fails to regulate cryptocurrency trade between individuals.

Besides, the present-day Russian laws do not specify how an ownership of digital financial assets and digital currencies may be verified in the Russian jurisdiction.

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