The cryptocurrency ban divides Russia
The cryptocurrency ban divides Russia
Regulation

The cryptocurrency ban divides Russia

By Eleonora Spagnolo - 18 Jun 2020

Chevron down

The cryptocurrency law that would impose a real ban divides the government of Russia. The Minister of Economy and the Minister of Justice would have expressed reservations about the draft law currently in circulation. 

The last in order of time is the Minister of Justice, as reported by the local newspaper Izvestia. In fact, if passed, the new law would prohibit cryptocurrency trading, allowing only possession in case of inheritance or reimbursement for legal proceedings. 

According to Minister Denis Novak, the problem lies in the fact that Russia has no facilities to seize or otherwise manage virtual currencies. That is why he suggests creating a special government agency

Even in the case of confiscation of cryptocurrencies and their transfer as reimbursement can only take place through an address of which the government may be the owner. The penalty, the concrete risk of losing or rather never being able to take possession of the digital assets. 

Other concerns of the Russian Ministry of Justice would concern fines. In fact, the bill provides that in case of illegal possession of cryptocurrency, offenders can be punished with fines of up to 500,000 rubles (about 7,000 dollars or 6,500 euros). 

But these measures, in the opinion of the competent minister, would contradict the current regulations, and would not clearly indicate who to punish and for what offences. 

In short, the bill is too vague when put in these terms. 

Cryptocurrency ban in Russia, the disliked legislation

The Minister for Economic Affairs also expressed scepticism. For the owner of the department, it is necessary to create mechanisms that allow the controlled circulation of virtual money. This is what the Kommersant newspaper has been reporting in recent days.

In practice, the Minister of Economic Affairs does not want a ban on cryptocurrencies, preferring instead to regulate them and establish requirements for issuance and circulation, as well as requirements for proper state control. 

The Russian crypto community reacted negatively to the bill. In fact, cryptocurrencies would be banned or otherwise subject to strict state control. According to the supporters of Bitcoin and other cryptocurrencies, the use of the potential offered by digital currencies should not be ruled out at such a difficult time for the economy

In addition, it was stressed by Alexander Zhuravlev, President of the Committee on Legal Support for the Digital Economy of the Moscow branch of the Association of Russian lawyers, that the crypto ban would not prohibit its circulation, because users would find ways to circumvent the bans. 

Dmitry Zakharov, director-general of the digital school in Moscow, was also very receptive and said that if the bill was passed, Russia would lose great possibilities. These opportunities are identified in taxation, mining activities, but also in the “brain drain” of those who work in this sector. 

The Duma, i.e. the Russian Parliament, has not officially decided anything yet. But it will have to clash with a high interest in Bitcoin in Russia, as shown by the increased BTC trading volumes during the lockdown period caused by the Coronavirus.

 

Eleonora Spagnolo
Eleonora Spagnolo

Journalist passionate about the web and the digital world. She graduated with honours in Multimedia Publishing at the University La Sapienza in Rome and completed a master's degree in Web and Social Media Marketing.

We use cookies to make sure you can have the best experience on our site. If you continue to use this site we will assume that you are happy with it.