Russia proposes a bitcoin ban

In Russia, parliament has proposed amendments to issue a ban on bitcoin and cryptocurrencies, which would make the crypto trading illegal, with penalties of up to seven years in prison. 

This is reported by the local source RBC.ru, according to which the State Duma has proposed a number of draft laws on the circulation and issuance of cryptocurrencies with heavy penalties for possible violations. 

These proposals, however, have not yet been voted on. So far they have only been sent to the Ministry of Economic Development, and the head of the Financial Markets Committee, Anatoly Aksakov, said that the final text has not yet been approved.

According to Dmitry Kirillov, senior lawyer at Bryan Cave Leighton Paisner, who teaches at the digital school in Moscow, the adoption of this law would in fact mean the cessation of the circulation of cryptocurrencies in Russia. 

In addition, with the ban, cryptocurrencies and Bitcoin couldn’t be sold, traded or mined either. 

Only possession, receipt and transfer would be allowed, but only upon declaration. In addition, private companies and legal entities would also be prohibited from carrying out transactions with digital currencies, for example to accept them as payment for goods or services. 

Bitcoin ban penalties in Russia

With regard to the proposed penalties, there would be fines for organizing exchanges or transactions or providing services for the issuance of digital assets using sites registered in Russia or hardware located in Russia, from a minimum of 50 thousand to a maximum of 1 million rubles ($14,000). 

For those who use cryptocurrencies as a means of payment, there would be confiscation of assets and a fine of between 20 thousand and 400 thousand rubles ($5,600).

In case of serious damage caused to citizens, organizations or public bodies, or if the illegal actions would lead to large-scale enrichment, there would also be imprisonment ranging from one to seven years. 

According to the general manager of OrderCom LLC, Dmitry Galushko, the adoption of this bill would end the crypto economy of the country.

“If the Russian Federation plans to create a digital economy, then a completely different approach is needed – not to ban, but to provide an opportunity to develop innovative ideas and projects, technologies”.

This law proposal seems far too stringent to imagine that it can actually be passed. 

The Chinese example shows how, even with such stringent laws imposed by an authoritarian state, citizens often continue to use and exchange cryptocurrencies, simply by using external instruments. 

Moreover, it is difficult to imagine that Russia wants to cut itself off from the crypto world, now that China and the US seem to be getting ever more serious. 

In fact, this is just a draft bill, whose real chances of being passed are unclear. 

In Russia, there really does seem to be a negative attitude towards cryptocurrencies, especially in politics, but since it is technically impossible to prevent people from using them, the state could end up looking like the Chinese state, which first tried to block their use and then was actually forced to reconsider.