According to local news reports, Russia’s Ministry of Finance (MoF) circulated new bills to relevant departments intending to pass a new regulation regarding the non-disclosure of transactions involving cryptocurrency. These new regulations obligate citizens to declare all their cryptocurrency operations, as well as the contents of their crypto wallets.
It has been Russia’s character to hold an iron grip over its resources, and its regulatory stance over cryptocurrency is no different. While the country was the pioneer of using blockchain tech in voting procedure, its MoF is not very excited by the prospect of blockchain’s scion – cryptocurrency.
The new MoF regulations also enforce crypto exchanges and exchangers to inform tax authorities about crypto transfers. The Ministry also decided to slap criminal charges for non-compliance to these regulations.
To successfully execute this new policy, the Ministry is proposing amendments to the country’s Criminal Code, Administrative Code, Tax Code, and the law against money laundering. The implementation of this policy is expected to begin in 2021.
According to the new legislation, citizens who have received more than 100 thousand Rubles in digital currency have to report the same to their tax authorities. The first such tax filing would take place in April 2021, and failure to comply would result in fines of up to 30% of crypto assets, with a minimum 50 thousand Rubles limit.
However, Moscow is not limiting punishment to monetary compensations. If the state discovers non-declaration of a crypto wallet with dealings of more than a million Rubles in cryptocurrency, then the punishment can be forced labour or imprisonment up to 3 years.
Crypto – currency or property?
The altered regulations set by Russia’s MoF are expected to receive a backlash from political and legal experts. The amended criminal code considers the use of cryptocurrency in the commission of crime to be an aggravating circumstance. However, according to legal expert Dmitry Zakharov, this is not reasonable because the use of any other currency is not considered an aggravating circumstance.