Russia’s Crypto Regulation is Advancing But There is a Catch

Russia’s Crypto Regulation is Advancing But There is a Catch

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Russia's crypto regulation is advancing but raises concerns here is a catch


Russia’s Ministry of Finance is heading closer to finalizing the bill on the mining and circulation of digital assets. As per coverage by Kommersant, the bill contains a comprehensive regulatory framework and for the first time dealt with the mining aspect, at length. 

Kommersant revealed that the current version of the draft law of the Ministry of Finance “On digital currency”, prescribes the rules for trading and mining for such assets. The authenticity of the document was confirmed by two Kommersant sources close to the industry. The Ministry of Finance did not immediately provide a comment.

Coming back to its contents, the draft established a number of aspects such as the terminology associated with digital currency, the legal framework for its circulation, issues, and so forth. Additionally, the document introduces a large number of stringent requirements for identification, accounting, and certification.

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Russia’s Crypto Regulation is Advancing But There is a Catch 3

Russia’s crypto bill might drive investors to the black market

Sources close to the industry sought to dispel the fear by saying that these requirements will not affect operations with cryptocurrency outside the Russian information infrastructure. However, Sergei Mendeleev, CEO of InDeFi Smart Bank raised questions about the interpretation of the latter aspect.

Citing an example of the tether website which states that “it does not have an obligated person, but Russian law enforcers believe that it is Tether LTD”.

Apart from that, the document allows only domestic legal entities to carry out the role of both operators. Foreign crypto exchanges, in order to obtain a license to operate in the Russian Federation, must create a business entity.

While many experts hailed the move, believing that the document would provide new opportunities for miners, looking for a way out of “the gray zone,” others, however, feel that this would instead push investors to the black market.

The concerns raised are valid to a certain extent as Russia is known for its high-profile illegal market which has hogged the limelight owing to the current geopolitical situation.

Last week, TronWeekly reported on how Russia’s most dreaded darknet market- Hydra, and a cryptocurrency exchange Garantex have come under US sanctions for their alleged role in ransomware activities. The US Treasury Dept teamed up with the FBI, and German Federal Criminal Police to shut down several Hydra servers in Germany, seizing $25 million worth of bitcoin.

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