Russia: Crypto Bill Review Regulates Crypto-Fiat Transactions Over $9.6K, Report Says
A review of Russia’s “On Digital Financial Assets” draft bill specifies that large crypto to fiat exchanges are subject to certain regulations, local sources report.
The Russian government has reportedly prepared a review of the draft bill “On Digital Financial Assets,” detailing that the exchange of cryptocurrency for fiat for more than 600,000 rubles (about $9,600) or its foreign equivalent is subject to mandatory currency exchange regulation, according to local crypto news outlet Forklog Friday, April 13.
This review has not yet been presented to the State Duma, according to Anatoly Aksakov, the head of the financial market committee. Forklog notes that transactions of more than 600,000 rubles are already tracked by Russian banks for prevention of money laundering and terrorism financing.
The latest version of the “On Digital Financial Assets” draft bill, submitted to the State Duma on March 20, 2018, defines crypto and digital tokens as digital financial assets that can only be traded on authorized crypto exchanges, as well as details KYC regulations for Initial Coin Offerings (ICO). The March 20 version of the bill would also require user accounts at crypto exchanges to be verified for AML and and counter terrorism financing (CTF).
Crypto exchange operators should be subject to Article 5 of Federal Law 115-FZ (against AML and CTF) or they will lose their license, according to Russia’s Federal Financial Monitoring Service.
Yuri Pripachkin, the president of the Russian Association of Cryptocurrency and Blockchain (RACIB), said that the latest version of the bill, which requires crypto transactions to fall under bank and Federal Financial Monitoring Service control, may make Russian crypto miners leave the country to work in more “crypto-friendly” places. Forklog notes that the recent draft bill review does not mention taxes on crypto mining profits.
As the draft bill classifies crypto as property – thus not a legitimate payment system in Russia – the government also wants to tax digital asset transactions.
According to Teimuraz Vashakmadze, an associate professor at the Russian Presidential Academy of National Economy and Public Administration, a 13 percent personal income tax could be imposed on crypto traders, although the anonymity of crypto trades may make this difficult:
“If the person themselves does not announce that they bought and sold Bitcoins, then no one will know about it, so many people will not voluntarily declare such income."
According to RACIB in January 2018, the long-discussed “CryptoRuble,” a state-issued cryptocurrency, would be launched in mid-2019.