Putin orders central bank to audit public officials’ crypto disclosure

abdelaziz Fathi

Russian public officials who were required to report their cryptocurrency holdings will have their disclosures audited by the central bank and other authorities, according to an order signed by President Vladimir Putin.

Russia

The regulatory checks come a few days after Putin has approved the National Plan for Countering Corruption for 2021–2024. Before that, the Russian government asked public officials who own or trade cryptocurrencies to disclose their holdings, and the first reporting deadline was June 30, 2021.

Within this context, Putin has instructed the Bank of Russia to co-operate with the ministries of finance and labor to propose crypto-asset inspections.

Failing to disclose data or deliberately providing false information is a criminal offence. Penalties for unreported crypto transactions include a jail term of up to three years and a fine ranging from 500,000 rubles to 2 million rubles, the finance ministry proposed.

Russian officials, as well as their spouses and children, are required to report their crypto holdings to the tax authority if the total transaction amount exceeds RUB 600,000 in a calendar year.

In August 2020, lawmakers approved a bill giving legal status to cryptocurrency, though it prohibits its use as a means of payment. The law also provided the regulatory framework of digital financial asset (DFA) transactions.

Notably, the Russian finance ministry suggested that these laws may not be the final word on the subject. Instead of bills submitted to the Russian parliament that seek punishing crypto dealers with prison terms and hefty fines, the ministry wants to establish mechanisms for ‘the controlled circulation of virtual money’. The authority believes that the adoption of the current bill version will only create an ‘uncontrolled black market’.

Officials said they developed new amendments to the country’s cryptocurrency regulation, which outlines a new set of rules for crypto holders, exchanges and miners.

In contrast, recent draft bills submitted by a group of deputies seek to penalize individuals with seven years in prison and fines of up to $7,000 for using cryptocurrencies in financial transactions. In addition, crypto firms could face nearly $30,000 in regulatory fines if they get involved in crypto business without approval from the Russian central bank.

In an effort to foster regulatory clarity in the Russian cryptos pace, the central bank has proposed fresh guidelines to govern market participants and floated the idea of a digital rouble.

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