Crypto Regulations in Russia
In July 2020, Vladimir Putin signed a regulation on digital financial asset (DFA) transactions that legalizes cryptocurrency transactions but prohibits their use as payments for goods and services. Russian banks and exchanges can be operators of DFAs if they register with the central bank known as the Bank of Russia. The Bank of Russia has the authority to maintain the registration of information systems and register operators of DFAs and supervise” the business of information system operators.” To challenge cryptocurrency transactions in court, parties must have declared these transactions and their possession of cryptocurrency.
Source: Freeman Law
Russian Prime Minister Mikhail Mishustin on Tuesday officially instructed the government to come to a consensus regarding crypto regulation in Russia by Dec. 19, 2022. The prime minister specifically called on the Duma and other state authorities to come up with coordinated policies on regulating the issuance and circulation of digital currencies in Russia. Mishustin also asked regulators to finalize regulations for cryptocurrency mining and cross-border transactions in digital currencies. The official stressed that the upcoming draft crypto regulations should be aligned with the Russian Finance Ministry, the central bank, the Anti-Money Laundering authority Rosfinmonitoring, the Federal Tax Service, and the Federal Security Service.
Source: Coin Telegraph
Russia has plans to issue its own digital rouble, but the government has only recently come round to supporting the use of private cryptocurrencies, having argued for years that they could be used in money laundering or to finance terrorism.
Source: FSR EUI
Crypto in Russia is already a contentious topic as many factions within the government debate whether to regulate or ban crypto. The protocol reported back in January on the government’s disagreement over what to do with cryptocurrency. The Central Bank of Russia called for a crypto ban, however, the Ministry of Finance opposed that stance, saying instead that the current regulation is sufficient and necessary to allow crypto technology to develop.
Source: Mashable
A series of bans for virtual assets in Russia In the past, Russia’s government has not hidden its dislike for the asset class and has passed several pronouncements outlawing their use. In 2020, the country passed a groundbreaking “Digital Financial Assets” law that banned digital currencies as a payment mechanism.
Source: Coin Geek
It also establishes tax rates on income earned from the sale of digital assets. The current rate on transactions is 20 percent, the same as for standard assets. Under the new law, the tax would be 13 percent for Russian companies and 15 percent for foreign ones. The draft must still be reviewed by the upper house and signed by President Vladimir Putin to become law.
Source: Euro News
The new bill on taxation of cryptocurrency aims at implementing the Federal Law on Digital Financial Assets and Digital Currencies. The bill stipulates that cryptocurrency must be treated as “personal assets” subject to a mandatory declaration with the Russian tax authorities (Bill No. 1065710-7, art. 38, § 2) and obligates citizens, residents, registered legal and corporate entities, registered representations of foreign companies, and international institutions on the territory of the Russian Federation to inform authorities about digital currency possession rights they have obtained, digital currency transactions, and digital currency balances. (Ch. 21, art. 1, § 16.) The bill states that failing to present timely reports about operations involving digital currencies and presenting inaccurate information constitute tax offenses. (Art. 129(15), § 4.) In such cases, the penalty must be 10% of the total value (in rubles) of the cryptocurrency received or cryptocurrency transferred. The value of the cryptocurrency reported will be calculated by the national tax agency on the basis of the market value at the time of the transaction.
Source: Library of Congress
The first important matter regulated by the Act is the so-called ‘digital financial assets’ (DFA). The Act uses this term as opposed to the term found in the bill adopted by the State Duma in the first reading, which originally applied the term ‘token’. If we consider the legal nature of DFA, we may conclude that it closely resembles the legal nature of securities. For example, imagine there is a debt arising as a result of some loan. It may be transferred under an assignment agreement. However, each creditor who decided to transfer the claim further must also transfer a range of documents to a new creditor, particularly confirmations of received payments. If this loan originated through the procedure of a bond allotment, the process of transferring the claim would be much easier and faster. The claim to the issuer of the bond, which is certified by securities accounted for electronically, may be purchased through a few clicks on a phone or a computer.
Source: IBA Net
The Russian government is developing its own central bank digital currency, a so-called digital ruble that it hopes to use to trade directly with other countries willing to accept it without first converting it into dollars. Hacking techniques like ransomware could help Russians steal digital currencies and makeup revenue lost to sanctions.
Source: New York Times
Work is underway in Russia to launch a “tokenized crypto ruble” on the Ethereum blockchain, the CEO of decentralized finance (defi) banking platform Indefibank, Sergey Mendeleev, announced during the Blockchain Life 2022 conference. The plan is to issue the token through a decentralized smart contract with excess collateral, or based on the model employed by the DAI stablecoin, the executive explained. Its exchange rate with the Russian ruble will be 1:1. Quoted by the crypto news outlet Forklog, Mendeleev detailed.
Source: Bitcoin
Cyber warfare is increasingly becoming a popular front for countries to deal with various geo-political and economic tensions, as the damage which can be induced through this means is much larger than just physical annihilation. Ransomware attacks in exchange for millions in ransom as well as distributed denial of service (DDoS) attacks have become common during heightened geopolitical tension between countries.
As Russia declared war against Ukraine, the latter was hit by a series of data wiping DDoS hacks, now known as “Wiper” attacks. Slovakia-based cyber security firm Eset, stated on Twitter, saying, “The data wiping program was present on hundreds of devices in the country, an attack it said had presumably been in the works for months.”
Source: Outlook
Unknown scammers have organized a fake bitcoin giveaway through a Russian government website they hacked. The news of the attack comes after a recent report revealed that damages from crypto-related fraud in Russia have reached $30 million in value in the first half of this year.
Source: Bitcoin
Alexander Vinnik was arrested in a small beachside village in northern Greece on Tuesday, according to local authorities, following an investigation led by the U.S. Justice Department along with several other federal agencies and task forces. U.S. officials described Vinnik in a Justice Department statement as the operator of BTC-e, an exchange used to trade the digital currency bitcoin since 2011. They alleged Vinnik and his firm “received” more than $4 billion in bitcoin and did substantial business in the United States without following appropriate protocols to protect against money laundering and other crimes.
Source: Reuters
The Bank of Russia’s regulatory sandbox is a mechanism for piloting and modeling processes of new financial services and technologies, which require changes in legal regulation, in an isolated environment. In the context of the implementation of the Guidelines for Financial Technology Development for 2018-2020, the Bank of Russia launched the regulatory sandbox in April 2018; it means that innovative financial technologies and services can be piloted in the financial market. High-priority pilot projects include big data and machine learning technologies, mobile technologies, artificial intelligence, biometric technologies, distributed ledger technologies, open interface solutions, digital profile technologies, etc.
Source: CBR
