The draft bills were proposed with Russia’s Ministry of Economic Development earlier this week, says a report published by local news company RBC on May 21. One of the proposed laws plans to completely stop digital assets from being used as a means of payment by citizens or corporations.
As reported by RBC a Russia’s local news ” Based on the new, not yet adopted amendments, administrative and criminal liability is provided for violation of the new cryptocurrency ban. The community is confident that such regulation will destroy the blockchain industry in Russia.
The Details of the Proposed Bill as Below.
Administrative liability provides for a fine for organizing the illegal turnover of cryptocurrency and for making transactions with it. Punishment will also follow in the case of the provision of services for the issuance of digital assets using sites registered in Russia, or hardware located in Russia. The number of sanctions will be as discussed below.
- For Individuals – from 50k to 500k rubles.
- For legal Entities – from 200k to 1 million rubles.
- For Officials – from 100k to 1 million rubles, or disqualification for a period of 6 months to one year.
Fines are also levied for violation of the rules for transactions with cryptocurrencies if they are used as payment for goods or services. In this case, the confiscation of assets is provided, the amount of the fine will be as follows:
- For Individuals – from 20k to 200k rubles.
- For legal entities – from 100k to 1 Million rubles.
- For officials – from 50k to 400k rubles.
Criminal liability will be liable for violations provided for by the administrative part, but if major or especially large damage was caused to citizens, organizations, or the state, or if these actions led to enrichment on a large or especially large scale. Punishment will also follow in case of the purchase of cryptocurrency in Russia for cash or by transfer to accounts opened with Russian banks. For violation shall be relied on as discussed below :
- Fine from 500k to 1 Million rubles, or in the amount of the offender’s income from one to two years.
- or Imprisonment of up to 4 years with a fine of up to 5000k rubles, or in the amount of income up to one year.
The following sanctions are provided for violation of the law, which led to especially large damage or enrichment as discussed below.
- Forced labor up to 5 years
- or imprisonment of up to 7 years with a fine of up to 1 million rubles, or in the amount of the convicted person’s income for a period of up to 5 years.
People will also be penalized for buying crypto with cash or transferring to accounts opened with Russian banks.
If this law comes into effect into law, the bills will punish companies that issue or operate virtual currencies without approval from the Russian central bank, with fines of up to two million rubles or about $28,000.
People who currently own cryptocurrencies will be forced to get rid of them before the law comes into force or risk ‘going underground.’ Goals that will be achieved this way are the direct opposite of what’s being declared. In general, the idea of dropping a crypto ‘Iron Curtain,’ in my opinion, does not contribute to the development of businesses or Russia’s interaction with the world economy on a digital level.Dmitry Kirillov, a senior tax lawyer in Russia