Russia’s Finance Ministry files cryptocurrency bill with the Parliament

Maria Nikolova

Cryptocurrencies are treated as financial assets but not as payment means.

The Russian Ministry of Finance has filed a “Digital Financial Assets” bill with the Duma, the lower chamber of the Russian Parliament.

The document aims to fit cryptocurrencies, tokens, mining and related operations in the Russian legal system.

The bill states that owners of digital financial assets have the right to exchange tokens for rubles and foreign currency only via certain entities – operators of digital financial asset exchanges. These operators are the business entities licensed under the “Securities Market” law – brokers, dealers, etc.

The definition of mining includes the consumption of electricity. Mining will be treated as business activity in case the entity performing it exceeds the limit of power consumption set by the government for three months in a row.

The cryptocurrencies are defined as financial assets, created via a distributed ledger in line with the rules for maintaining a register of digital transactions. The bill notes that cryptocurrencies and tokens are not payment means in Russia.

Let’s note that the bill includes certain provisions aimed at securing investor protection. Thus. For example, the Bank of Russia will set a maximum sum that may be paid by non-experts (i.e., retail investors) to acquire tokens in an ICO.

The public offer and the investment memorandum should include detailed information about the ICO. The public offer, for instance, should provide (inter alia) information about the issuing party and its beneficial owner, including their addresses. The offer should also specify the maximum amount for acquiring tokens by retail investors, that is, investors that are not qualified under the “Securities Market” law.

The bill is published in response to orders issued by Russia’s President Vladimir Putin in October last year. Back then, he gave the Central Bank of Russia and the Russian government until July 1, 2018, to change Russian legislation so that it determines the status of DLT, cryptocurrencies, smart-contracts and tokens.

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