What is the state of crypto regulation in Russia?

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Although Russia proposed its first cryptocurrency law in January 2021, the country’s crypto market still looks rather hazy and is associated with a lot of uncertainty due to a lack of regulation.

As of January 1, 2021, cryptocurrencies have been declared “permitted” in Russia, but should not be used as an exchange for goods and services.

This means that Russians can mine, trade, and hold cryptocurrencies, but using them as a payment option is considered illegal.

However, Russia’s Attorney General’s office recently proposed to define cryptocurrency as property in the country’s criminal code.

Policymakers in Russia are reportedly working on a new law to “protect” non-professional investors from thoughtless cryptocurrency investments.

Anatoly Aksakov, chairman of the Russian State Duma committee, said Russia needs new laws to be passed to protect retail investors from crypto risks.

“Digital assets are the subject of our special attention, and here we will look at how to protect our citizens as much as possible when investing in digital currencies and digital assets, because it is a new tool and it is enough difficult for an unqualified. investor, ”Aksakov said.

For now, the future of crypto in Russia seems rather unclear. The government has talked about creating Russia’s own regulated digital currency, but holding undeclared cryptocurrency between $ 1,300 and $ 13,000 can be fined and can even lead to jail time.

Russian President Vladimir Putin recently signaled his tolerance for cryptocurrencies, saying they “have a right to exist and can be used as a form of payment.”

Still, he warned it was too early to talk about using digital currencies to trade oil and other commodities that make up the bulk of Russia’s exports.

Recent reports have shown that 77% of Russian investors believe investing in crypto is “the most forward-looking” investment.

Attorney General wants crypto to be recognized as property under criminal law

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The Office of the Prosecutor General of the Russian Federation, Igor Krasnov, also announced that it has prepared a bill to recognize cryptocurrency and other virtual assets as property.

The legal definition will be used in court proceedings under the Criminal Code, Krasnov explained and expressed concerns about the increasing use of modern financial technologies to commit crimes.

Krasnov revealed that his department had already taken the initiative and drafted a bill that would regulate the matter, and said he hoped lawmakers would back him up.

To date, cryptocurrencies remain only partially regulated in the Russian Federation, mainly through the “Digital Financial Assets” law which came into effect in January of this year.

Although it introduced terms and rules relating to cryptocurrency and related activities such as ‘issuing digital currencies’, it did not address other areas such as cryptocurrency mining or payments, for example.

While the idea of ​​recognizing mining as a pure business has won the support of Moscow officials, the Bank of Russia still opposes it, allowing the free flow of cryptocurrencies in the Russian economy.

The head of the monetary authority, Elvira Nabiullina, recently said that the digital ruble, which is currently in development, is what Russian citizens really need while again rejecting cryptocurrencies which, as she lends ‘insisted, present risks to financial stability.

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