Russian cryptocurrency enthusiasts have nothing to worry about, at least for now. This is after the country’s Parliament dropped initial plans to outlaw bitcoin transactions.
According to the local media, the Russian Parliament has revised sections of the Digital Financial Assets Bill (DFA). The report indicates that the State Duma redacted references to administrative and criminal liability for dealing in Bitcoin. The bill is due for the second reading on July 21, 2020, before the third and final reading establishes it as a law.
Penalizing Bitcoin Investors
Anatoly Aksakov, the head of Parliament’s financial markets committee to a local news agency, “there will be no liability in this bill.”Aksakov, who sponsored the draft, explained that they had temporarily set aside penalizing Bitcoin investors with hail terms and fines. Aksakov stated:
“They’ve removed everything. There’s only a link that the regulation of digital currency will be determined in another law.”
The original DFA bill had proposed fines of up to $7,000 or seven years behind bars for anyone buying bitcoin using cash. The proposed legislation also planned to punish institutions that issue or operate cryptocurrency businesses without approval from the Russian Central Bank with fines of up to $28,000.
Curtail the Distribution of Information
The original bill also proposed that firms would have to pay $13,900 and individuals $2,800, “for violation of the rules for transactions with cryptocurrencies if used as payment for goods or services.” Aksakov said the revised draft law now addresses issues around the definition of digital financial assets and establishes requirements for blockchain operations, among other matters.
The first draft bill had proposed the strict regulation of digital currencies in Russia. The law would have prohibited the issuance of, and operations using cryptocurrencies in the country. The law had gone even further to curtail the distribution of information about such activities.
The law proposed to bar companies and individuals from accepting cryptocurrency payments. The only exception would have been if the coins were inherited, distributed to the debtors of a bankrupt company, or confiscated due to a court decision. People owning cryptocurrency should declare it at the tax agency and provide information on how it was purchased.
With this new development, the Russian lawmakers are planning a “special law” on cryptocurrency regulation. There is fear this could reintroduce stiffer penalties for dealing in cryptocurrencies as initially proposed. According to Aksakov:
“There will be a special law on digital currency, which can be adopted in the autumn session.”
There is no clear law in Russia regarding cryptocurrencies. The legal status of Initial Coin Offerings (ICOs), smart contracts, and bitcoin mining remain unclear despite the large number of proposals brought to Parliament. Meanwhile, the rest of the world seems to have caught the bitcoin fever. The number of Fintechs and payment processors joining the bitcoin bandwagon continues to increase by the day.