Russia has been working to ensure that its financial regulations within their country appropriately cover cryptocurrency. Though their original decree on anti-money laundering came out in July 2015, new developments in cryptocurrency have urged them to make some changes. Based on a report from local news website Pravo, the Russia Supreme Court ruled that the illicit use of cryptocurrency will now be considered a criminal offense.
This clarification was implemented as part of the legalization of property acquired via criminal means. At the time that the original degree was implemented three years ago, cryptocurrency was a major means of criminal activity, according to Jude Alexander Chervotkin. He used multiple cases of drug dealers converting crypto assets to fiat currency as his supporting argument. Ultimately, Chervotkin concluded that these risks make it essential to include the technology in their criminal code.
To clarify, the crypto assets that are acquired by criminal means, and then converted to the fiat currency of the criminal’s choosing, will be subjected to the law. This process is considered as the laundering of funds, and any individual or entity caught performing this type of transaction will be charged with a criminal offense.
While this aggressive stance against crime is admirable, the Supreme Court still has not provided a legal definition to the varying types of cryptocurrency, which is primarily due to the lack of introducing the term at all. Furthermore, the actual exchange of cryptocurrency to fiat currency is not actually considered a crime. The only way to classify this process as a crime is if the court can prove that the digital assets in question were acquired through criminal actions.
These amendments, according to Chervotkin, were made in an effort to comply with the International Financial Action Task Force’s (FATF’s) recommendations for Money Laundering compliance. The FATF plans to visit the country next month as part of their regular monitoring of the local crypto and traditional finance activities. These visits are part of a premade schedule to monitor the area.
The most recent crypto bill suggested to the government, which passed its first reading almost a year ago, was sent back to legislators to continue to modify it. Last month, the legislators were urged to speed up the work they were pursuing on digital economy bills, at the request of the chairman of the upper house of Russia’s parliament. The hearing on the crypto-related bill is planned for March 2019.
Along with the abovementioned bill, the country’s parliament is considering the idea of an oil-based cryptocurrency, which seems to be a lot like the Venezuelan Petro. While the Petro was launched in February last year as a result of trying to contain the economy’s spending amid hyperinflation, there’s been no evidence of work in Russia on this type of oil-based coin.