Russian Legislators to Consider Crypto Mining Regulations and Fines Before the End of June
- World’s powerful man and Russia’s President, Vladimir Putin has instructed his country’s legislative arm to adopt federal laws relating to virtual currency by July this year.
- Earlier this year, Russia expanded the description of digital financial assets to include virtual currencies.
Lack of Regulatory Clarity Regarding Use of Cryptos
Vladimir’s latest order looks a lot like the order he made regarding cryptocurrency regulation last year.
According to the latest orders, the Russian Duma is being urged to introduce administrative penalties for crypto miners who mine virtual currencies through open blockchains, the Chairman of the State Duma Committee on Financial Markets, Anatoly Aksakov, told news agencies.
Mr. Anatoly stated that operations that involve virtual currencies are yet to be covered by Russian laws and should be treated as unlawful. This means that crypto mining of such instruments ought to be banned and going against the prohibition should be met by administrative penalties and fines.
New Guidelines Introduced By Financial Action Task Force (FATF)
It is important to note that owning crypto assets is permitted in Russia if the digital assets were purchased by international regulations in foreign exchanges, outside Russia.
As a result of the Financial Action Task Force (FATF) requirements concerning the regulation of existing virtual currencies such as Bitcoin, the Russian law on virtual financial assets has hit a deadlock allowing miners and crypto traders more time to engage in their operations.
If we can recall correctly, according to research that was conducted earlier this year, a higher percentage of Russians view Bitcoin as a non-profitable investment venture. According to the poll that was done by Russia’s Public Opinion Research Center, 56 percent of the respondents that were questioned said they had some level of knowledge concerning Bitcoin.
However, a meager 9 percent of those asked revealed they had detailed information on Bitcoin. Eighteen percent of those who were questioned said they had heard about the number one crypto but did not know anything else concerning the cryptocurrency.
Knowledge levels concerning Bitcoin are relatively low in Russia. For instance, among those who know about Bitcoin, 37 percent are sure that anyone can be able to be holders of the digital asset, whereas 12 percent believe the number one crypto is banned in the country.
Apart from this, 28 percent of the respondent examined gave a controversial finding that virtual currencies were safer and harder to steal when compared to conventional fiat currencies whereas 29 percent of the respondent argued that digital currencies were easy to steal in comparison to traditional fiat currencies.
Participate in Crypto Mining at your own Risk
During a press conference, the Chairman of the State Duma Committee on Financial Markets, Anatoly Aksakov, told reporters that:
“… actions with virtual assets, unconditional due to Russian law, will be treated as illegal. This means that crypto mining, circulation, organizing production, creating exchange points for these tools will be banned.”
Parties found participating in such actions will be punishable by paying fines. If the act of parliament goes through, the regulation will only apply to open blockchains such as Ethereum and Bitcoin. State-backed cryptocurrencies such as Crypto-Ruble will be exempted from this regulation.
Is it the End for Cryptocurrency in Russia?
Despite the proposal to ban crypto mining and other crypto activities, Mr. Anatoly stressed that owning Bitcoin and other cryptos would still be allowed in the country. That is if they were acquired under foreign regulations at foreign points of exchange and sale. Any crypto exchange or point of sale in the country would be considered as illegal in the same way as mining.
Furthermore, Anatoly confessed the governments interest in technologies such as Lightning Network which advances the speed of settlements as an area of interest.
Despite the apparent never-ending delays to the Bill that is before the Duma, Anatoly claims the government is this time around focused in passing the Bill before the end of the June spring session.
The June deadline was set by President Vladimir back in February, so the Bill will automatically get overwhelmingly support in the Duma.