Legislation on Digital Financial Assets and Digital Currency in Russia (259-FZ)

Main article: Cryptocurrencies in Russia

Taxes on cryptocurrency transactions (CFA)

Main article: Taxes on operations with cryptocurrencies (CFA) in Russia

Digital financial assets in Russia

Main article: Digital financial assets in Russia

Cryptocurrency inheritance

Main article: Cryptocurrency inheritance

2024

Which foreign companies will be able to store digital financial assets in Russia. Central Bank approved the rules

On July 31, 2024, the Bank of Russia announced rules for foreign companies performing the functions of nominal holders in relation to digital financial assets (CFA). The document establishes requirements for the procedure, terms, composition and form of provision by the foreign nominal holder of the CFA of information about its clients to the operator of the information system (OIS) in which the assets are issued.

The rules suggest that only foreign companies that can legally own and manage securities and property in their home country can keep digital assets. These companies must provide Russian OICs with information about their customers - individuals and legal entities. In particular, within seven business days after the request from the operator, the following information should be provided: full name, citizenship (citizenship), date of birth, name and details of the identity document, registration address at the place of residence (if any), email address (if any) and phone number (if any), bank account details (if any), etc.

The Bank of Russia has published rules for foreign companies performing the functions of nominal holders in relation to digital financial assets

In addition, the nominee must also provide information on the number of CFAs owned by its customers and information to identify such digital assets. The data is provided in hard copy, and if it is provided for by an electronic interaction agreement concluded between the foreign nominal holder of the CFA and the operator accounting for the relevant assets in the form of an electronic document.

Ilya Plotnikov, Managing Partner of the Plotnikov & Partners Legal Group, notes that the Bank of Russia's rules regarding the provision of information to the Russian OIC comply with world data exchange practice to ensure compliance procedures and KYC (Know Your Client, "know your client") in the financial sector. This information is required to meet regulatory requirements.^[1]

In Russia, allowed the circulation of foreign digital financial assets

On July 30, 2024, the State Duma of the Russian Federation adopted amendments that allow foreign digital financial assets (CFA) to trade on Russian blockchain sites. The Bank of Russia will have to control this process. At the same time, a mirror simplification of the exit of Russian CFAs to foreign platforms is being introduced.

The new norms, among other things, will expand the mechanisms for the use of digital rights in calculations during foreign trade activities. We are talking about foreign CFAs that fall under the definition prescribed for this type of assets in Russian legislation. These can be rights including monetary claims, the possibility of exercising rights under equity securities, the right to participate in the capital of a non-public joint-stock company, the right to demand the transfer of equity securities. The Russian operator for the release of the CFA will be able to allow the circulation of foreign digital assets at its site in accordance with the operator's internal document.

The State Duma allowed the appeal in Russia of foreign digital rights

The amendments say that the Bank of Russia can establish a ban on the qualification of certain foreign digital rights as digital rights on Russian blockchain platforms in order to ensure the stability of the financial market or in the event of a threat to the interests of investors. In addition, additional requirements may be imposed on foreign digital rights that are placed in Russian systems. The Bank of Russia will also be able to determine the requirements for persons who have the right to acquire foreign CFAs.

The law introduces the concept of "foreign nominal holder of digital financial assets." He keeps records and transfers of rights to the CFA credited to him, belonging to other persons, in accordance with the laws of his location or registration. The requirements for foreign nominal holders of the CFA will be established by the Bank of Russia.^[2]

Russia adopted a law on cross-border settlements and exchange trading in digital currency

On July 30, 2024, the State Duma of the Russian Federation adopted a law allowing cross-border settlements and exchange trading in digital currency. The corresponding operations will be carried out within the framework of experimental legal regimes (EPR).

The document, according to RIA Novosti, provides the possibility of functioning of the EPR mechanism in the field of digital innovation in the financial market. The Bank of Russia is entrusted with the functions of an authorized and regulatory body on EPR issues in this area. In some cases, the EPR program must be coordinated with Rosfinmonitoring, the FSB and the Ministry of Finance of the Russian Federation.

The State Duma adopted a law allowing cross-border settlements and exchange trading in digital currency

In accordance with the adopted law, cryptocurrency can be used as a means of payment in foreign trade activities under the EPR. At the same time, the rights and obligations of participants in such settlements, as well as currency control bodies and agents, should be determined. The Bank of Russia will have to monitor the activities of the initiators of the EPR "in order to identify the risks of harm to the defense and security of the state, as well as the risks of legalization of criminal proceeds and financing of terrorism."

Within the framework of the EPR, exchange trading in cryptocurrency is also allowed. The Bank of Russia will be able to create an electronic platform for transactions with digital currencies on the basis of the National Payment System (NPS), determine the rules of its work, as well as the requirements for the activities of its operator.

In general, it is alleged that the law is aimed at forming new types of economic activity, developing competition, expanding the composition, quality or availability of goods, works and services, increasing profits from entrepreneurial activity and reducing costs. It is expected that the implementation of innovations will not entail additional expenses from the federal budget and budgets of other levels, as well as negative socio-economic, financial and other consequences.^[3]

The State Duma introduced a new version of the bill on cross-border settlements in cryptocurrencies

A new version of the bill on international settlements in cryptocurrency was submitted to the State Duma. The draft law will allow the Bank of Russia to start creating an experimental platform in the field of cryptocurrency from September 1, 2024. This was announced on April 24, 2024 by the press service of the State Duma deputy RFAnton Nemkin.

It is assumed that now the steps to conduct the experiment the Central Bank will have to coordinate with Rosfinmonitoring, the FSB, as well as the Ministry of Finance. In addition, the new edition clarifies the rules for conducting transactions with digital currencies, in particular, their use as a means of payment under foreign trade agreements concluded between residents and non-residents.

The bill also refers to the rights and obligations of currency control bodies and agents and clarifies the rights and obligations of residents and non-residents when conducting foreign exchange transactions with digital currency.

Business has been using cryptocurrencies as one of the means of payment in procurement for a long time. Of course, significant growth occurred in 2022 - blockchain technologies are actually outside the sanctions policy regime, and this makes it possible for previous business partners to continue to develop cooperation. In addition, cryptocurrencies offer clear advantages: in addition to almost instant crediting of funds, the cost of commission services is minimal. But new technologies, of course, need a legal field. This will minimize the risks they carry, the deputy emphasized.

The bill provides for the creation of a separate experimental legal regime, the calculations in which will pass through the Central Bank. On the one hand, this will eliminate the destabilization of the domestic foreign exchange market. But on the other hand, the experimental regime should be considered as a pilot project to integrate cryptocurrencies into the white, legal field. In the future, of course, the experience gained can be transferred to other areas of monetary settlements, the parliamentarian believes.

The Central Bank of the Russian Federation will connect to the information exchange about fraudulent write-offs of CFA operators

The Central Bank of the Russian Federation has updated the procedure for informing about fraudulent transfers for operators of payment systems and operators of electronic platforms (OEP). It is established that CFA operators, as well as online services, from June 2024 will transmit information about financial transactions carried out "without coordination with customers," as well as about "attempts to make" such transfers on a par with banks and payment systems operators. This was reported on March 22, 2024 by the press service of the State Duma deputy RFAnton Nemkin with reference to Kommersant. Read more here.

2023: Plan to launch cryptocurrency exchange between foreign trade participants

The Bank of Russia, within the framework of an experimental legal regime, may allow private companies to exchange cryptocurrency for foreign economic activity participants. However, at the first stage, this mechanism should be checked at companies with state participation, Deputy Chairman of the Central Bank Alexei Guznov said in May 2023.

2022

Digital ruble will appear in the reporting of Russian banks

At the end of September 2022, it became known about the introduction CENTRAL BANK OF THE RUSSIAN FEDERATION of the concept of digital into the chart of accounts of credit institutions. ruble According to the regulator's requirement, from 2023 banks they will begin to reflect a number of new positions, in particular, accounts for accounting and movement of the digital ruble on the digital wallet of a credit institution. More. here

Russian court first arrested stolen cryptocurrency

On April 5, 2022, a Russian court for the first time allowed the arrest of stolen cryptocurrency. A precedent in the judicial practice of the Russian Federation occurred in St. Petersburg. Read more here.

Putin ordered election candidates to declare digital assets

On April 1, 2022, it became known Russia Vladimir Putin about the law signed by the president, which obliges election candidates to declare their digital financial assets (CFA). The corresponding document is published on the official portal of legal information.

In accordance with the law, election participants are required to report on their expenses, expenses of a spouse or spouse and minor children for each transaction for the acquisition of CFA and tokens over the past three years. It will be necessary to provide information only if the purchase amount exceeds the total income of the candidate and his spouse three years before the transaction. At the same time, candidates will need to disclose information about the sources of funds for the purchase of cryptocurrency.

The decision will affect candidates in the presidential elections in Russia and State Duma deputies. The relevant changes were also made to the laws on the procedure for forming the Federation Council, political parties, combating corruption, monitoring the compliance of the expenses of state officials with their income, on the basic guarantees of electoral rights and the right to participate in the referendum of Russian citizens.

As noted in the accompanying documents, the law is aimed at maintaining the "unified legal nature of declaring income, expenses, property and property obligations established in Russia by certain categories of officials and candidates participating in the elections (including federal state authorities, state authorities of constituent entities of the Russian Federation)based on the principles of publicity and openness of public administration (local self-government), observance of the rights and freedoms of citizens and organizations. "

The law obliging election candidates to disclose information about their expenses for the acquisition of digital financial assets was adopted by the State Duma on March 23, 2022. On the same day, it was approved by the Federation Council.^[4]"

The Ministry of Finance of the Russian Federation submitted to the government a bill on the regulation of cryptocurrencies

The Ministry of Finance of the Russian Federation on February 18, 2022 submitted to the government a bill on the regulation of cryptocurrencies in Russia, the ministry said in a statement.

• The Ministry of Finance will establish requirements for exchanges and exchangers who will be engaged in activities related to cryptocurrency.

• Input and output of cryptocurrency from a client to the operator and vice versa will be possible only through banks using a bank account.

• Russians before acquiring cryptocurrency will have to undergo online testing, with successful passage it will be possible to invest up to 600 thousand rubles a year, without a test - 50 thousand rubles, while qualified investors and legal entities will be allowed to perform operations without restrictions.

• Transactions with the purchase or sale of cryptocurrency will be possible only if the client is identified.

• The Ministry of Finance of the Russian Federation proposes to legislate the definition of digital mining as activities aimed at obtaining cryptocurrency.

• Foreign cryptocurrency exchanges will have to register in Russia to obtain a license.

• The use of digital currencies as a means of payment in the Russian Federation will continue to be prohibited.

The Government of the Russian Federation approved the Concept of legislative regulation of the turnover of digital currencies

February 8, 2022 The Government of the Russian Federation approved the Concept of legislative regulation of the turnover of digital currencies.

• The turnover of such financial assets will be regulated by the state. Strict obligations will be established for all participants in the professional market with an emphasis on protecting the rights of ordinary investors.

• Cryptocurrency platforms will be required to have financial airbags in terms of liquidity and capital adequacy.

• Investors will be divided into qualified and unskilled. To buy or sell digital currency, you will need to pass identification.

• The concept of regulating digital currencies approved by the Cabinet of Ministers allows their purchase and sale on a foreign exchange.

• The purpose of the regulation is to integrate the mechanism of circulation of digital currencies into the financial system and ensure control over cash flows.

• The implementation of the concept will make it possible to form a regulatory legal framework, bring the digital currency industry out of the shadows and create the possibility of conducting legal entrepreneurial activity.

The Central Bank of the Russian Federation began to issue licenses for the management of digital financial assets

The Central Bank of the Russian Federation began issuing licenses for the management of digital financial assets (CFA), which the regulator announced on February 3, 2022. The first in the register of information system operators in which the CFA is issued was Atomyze, one of whose investors is Vladimir Potanin's Interros company. Read more here.

The Government of the Russian Federation approved the "roadmap" for cryptocurrencies

On January 28, 2022, it became known about the approval by Deputy Prime Minister Dmitry Chernyshenko of the roadmap for regulating operations with cryptocurrencies in the country. The document is designed for the period until the end of 2022. The main proposals in the road map are as follows:

• work out "the attributes and functionality of the compliance control system for the activities of organizers, operators and clients of p2p platforms and other systems, including providers of virtual asset services";
• finalize the provisions of the "regulatory and restrictive regime" for such providers, determine the status of market participants and the procedure for their activities, as well as select the body that will control this area;
• introduce the requirements of the Intergovernmental Group for the Development of Financial Measures to Combat money laundering (FATF) in terms of virtual assets into the system of "regulatory and restrictive measures";
• develop mechanisms for registration and reporting of organizations through which virtual assets are handled;
• determine administrative or criminal liability for crimes using cryptocurrencies (assumes responsibility for evading the declaration of information about transactions with cryptocurrencies);
• work out a mechanism for checking the provided data on the ownership of cryptocurrencies;
• finalize the bill on informing citizens about the ownership of digital currency and operations with it;
• introduce administrative responsibility for the illegal circulation of digital financial assets and violation of the rules for conducting transactions with them, as well as for organizing the illegal reception of cryptocurrency;
• determine the procedure for identifying customers of digital currency exchange operators (including by sending reports to Rosfinmonitoring);
• give a legal assessment of the use of dummies in settlements between individuals;
• analyze the "prohibitive norms" introduced in China in relation to cryptocurrencies;
• develop methods for assessing the value of cryptocurrency assets;
• work out the question whether the law on the activities of foreign Internet companies applies to cryptocurrency turnover sites (they are obliged to open branches in Russia).^[5]

The Ministry of Finance of the Russian Federation proposed to regulate cryptocurrencies, as in Switzerland

At the end of January 2022, the Ministry of Finance of the Russian Federation presented its own concept for regulating cryptocurrencies in the country. As a basis, the agency proposes to take the system used by the Swiss project Aximetria (providing crypto services in Europe, Asia, South America and the CIS with the exception of Russia). The main proposals of the Ministry of Finance are as follows:

• conduct operations with cryptocurrency in the perimeter of the banking infrastructure - this will help control operations and identify all participants;
• allow individuals and legal entities to conduct operations with cryptocurrency: they will need to pass identification and open an electronic wallet in the bank. Individuals will be divided into qualified and unqualified investors;
• make the organizers of the digital currency exchange system banks with universal licenses that will control operations, identify illegal, identify customers, etc.;
• use the Transparent Blockchain service to track cryptocurrency transactions and identify illegal transactions;
• create digital currency exchange operators according to the p2p-exchanger model (between individuals) or according to the exchange model. Operators will be able to become companies that carry out transactions with cash: they will be able to exchange cryptocurrency for money or identify customers and provide banks with information about planned transactions;
• divide the functions of supervision between the Central Bank, the Ministry of Finance, Rosfinmonitoring, the Federal Tax Ministry of Digital Development and the Prosecutor General's Office.
• determine the key parameters of cryptocurrency mining: according to the Ministry of Finance, Russia ranks third in the world in mining.

The Ministry of Finance sent its proposals for regulating the Russian cryptocurrency market to Deputy Prime Minister Dmitry Chernyshenko. According to the President of the Russian Association of Crypto-Economics, Artificial Intelligence and Blockchain (RAKIB) Yuri Pripachkin, the concept of the Ministry of Finance has the correct cryptocurrency regulation system that solves the problems identified by the Central Bank.

This is the anonymity of transactions, the use of cryptocurrency for criminal purposes, issues of taxation and property rights of cryptocurrency owners, - he said in a conversation with RBC.[6]

2021

Court rejects claim to claim cryptocurrency in illegal possession

In November 2021, the Savelovsky Court of Moscow rejected the claim for the return of 16.6 bitcoin (more than $1.1 million), which were given to trust and lost. This is the first lawsuit in Russia to claim cryptocurrency in illegal possession.

In 2018, Andrei Petrov transferred bitcoin to his friend Igor Tukan's crypto wallet, giving them under control. They entered into an oral agreement that within five months, Tucan would invest the cryptocurrency and return it, keeping 20% of the profit. However, after the expiration of the contract, he said that he had lost cryptocurrency. The judge denied the claim.

Deputy Finance Minister: Russia does not plan to impose a ban on the purchase of cryptocurrencies by citizens outside the country

In October 2021, Deputy Finance Minister Alexei Moiseev said that Russia does not plan to follow China's path and impose a ban on the purchase of cryptocurrencies by citizens on foreign exchanges.

"Now I can only say that our settlements on the territory of the Russian Federation are prohibited. At the same time, citizens can buy and use wallets outside the Russian Federation. So it will remain for now, I think. There are no plans to change anything yet, "he said.

"The position now is a ban on operations with cryptocurrencies on the territory of the Russian Federation. Of course, a Russian citizen may have a wallet opened outside the Russian Federation, but it is operations within the Russian Federation that will be subject to bans, I think that in the entire viewed future, due to the fact that this is financial sovereignty, "he added.

Law No. 259-FZ "On Digital Financial Assets and Digital Currency" came into force

Russian citizens, along with the whole world, are enthusiastically watching the rapid growth of the bitcoin exchange rate. However, in the light of changing cryptoregulation, the question arises - how to invest in bitcoin and other cryptocurrencies in Russia and not violate the law? At the request of TAdviser, Mikhail Tretyak, partner of the Digital Rights Center law firm, answered this question.

What are the requirements for investing in cryptocurrency in Russia

On January 1, 2021, Law No. 259-FZ "On Digital Financial Assets, Digital Currency and on Amending Certain Legislative Acts of the Russian Federation" entered into force in the Russian Federation, which laid the foundations for regulating the cryptocurrency industry in our country. The law itself practically does not answer the question of what a citizen or company should do so that investments in bitcoin or any other operations with cryptocurrencies do not turn into problems with the law for them.

Nevertheless, the existing law contains the concept of "digital currency," which refers to bitcoin, ether and many other coins issued on the blockchain, and is defined as "a set of electronic data contained in the information system... in respect of which there is no person obligated to each holder of such electronic data... " Simply put, the law does not classify the main cryptocurrencies, bitcoin and ether, as digital financial assets. This means that today, in order to acquire cryptocurrency, ordinary citizens do not need to comply with any additional conditions, the law simply does not provide for them.

259-FZ draws a clear separation between digital financial assets and digital currencies, these are two completely different entities. We quote Article 1 of the Federal Law on CFA:

Article 1. Subject of regulation and scope of this Federal Law

1. This Federal Law regulates the relations arising from the issue, accounting and circulation of digital financial assets, the peculiarities of the information system operator in which the digital financial assets are issued, and the digital financial asset exchange operator, as well as the relations arising from the circulation of digital currency in the Russian Federation.

2. Digital financial assets are recognized as digital rights, including monetary claims, the possibility of exercising rights under issue securities, the right to participate in the capital of a non-public joint stock company, the right to demand the transfer of issue securities, which are provided for by the decision on the issue of digital financial assets in the manner established by this Federal Law, the issue, accounting and circulation of which is possible only by making (changes) to the information system based on the distributed register, as well as to other information systems.

3. A digital currency is a collection of electronic data (digital code or designation)contained in the information system, which are proposed and/or can be accepted as a means of payment, which is not a monetary unit of the Russian Federation, a monetary unit of a foreign state; (or) an international monetary or settlement unit, and/or as an investment and in respect of which there is no person obligated to each holder of such electronic data, except for the operator and (or) nodes of the information system, which are only obliged to ensure that the order of release of these electronic data and the implementation of actions in relation to them to make (change) records in such information system comply with its rules.

Therefore, it is enough, as before, to go to the website of the exchanger or crypto exchange, and go through the KYC (Know Your Customer) procedure by filling out information about yourself: provide a copy of the passport, confirm the registration address, and in some cases go through the video registration procedure, after which you can purchase cryptocurrency. Reporting, before the introduction of special reporting forms by the Federal Tax Service, is submitted by individuals under the same form of 3-NDFL.

Restrictions for officials and law enforcement officers

In the previous format, the acquisition of cryptocurrencies will be a legal operation only for ordinary citizens. Certain categories of citizens - for example, officials and employees of law enforcement agencies - can no longer legally acquire and sell cryptocurrencies from January 1, 2021. The details of these restrictions are set out in the information letter of the Ministry of Labor of Russia No. 18-2/10/V-12085 of December 16, 2020. The text of the letter provides explanations on two issues: what digital currencies officials cannot own and what information about digital currencies needs to be declared. An explanation is also given on the timing of the filing of the declaration.

Based on the text of the letter, from January 1, 2021, officials, deputies and other special categories of persons, as well as members of their families, cannot own digital financial assets of foreign origin, as well as digital currencies classified as foreign financial instruments. Until April 1, 2021, these categories of persons are required to get rid of foreign digital currencies and digital financial assets.

According to the content of the declaration and the timing of its submission, the Ministry of Labor explains in its letter that this information should apply only to those assets and currencies that were acquired from January 1, 2021, since... " the status of digital financial assets and digital currency in the Russian Federation is established from January 1, 2021, there is no need to report related transactions to acquire digital financial assets and digital currency, made in 2020. "The information letter of the Ministry of Labor appeared in connection with Presidential Decree No. 778 of December 10, 2020, obliging officials to report on the digital financial assets they own.

How will crypto exchanges and exchangers work?

The situation with regard to exchangers and crypto exchanges looks a little different. The adopted law has the concept of "operator of the exchange of digital financial assets," which, by definition, is closest to the work of exchangers and exchanges, however, it does not clearly indicate which exchangers this regulation refers to: Russian, international with foreign licenses, or to everyone at once. Most likely, we are talking about national exchangers and, possibly, about official missions of foreign exchanges, however, there are no explanations and clear definitions in the Law. But there is an obligation to actually obtain a license to work on the territory of the Russian Federation on extremely strict conditions: the exchange operator cannot be a credit institution, the personal law of such a legal entity can only be Russian law, the authorized capital and the size of the net assets of exchange operators cannot be less than 50 million rubles, the management of such a legal entity must be carried out by a collegial body, which cannot include offshore companies, etc. Obviously, the decision to issue a license in each specific case will depend entirely on the decision of the Bank of Russia.

The current law on CFA contains the only clearly established ban that is important for all market participants: you cannot accept digital currency as a counter-provision for goods, works and services, since digital currencies are not legal tender in Russia, that is, they are not equated to the ruble. At the same time, the current law does not regulate either the organization of the issue or the organization of the turnover of cryptocurrencies, it only defines these concepts in Article 14: "The issue of digital currency in the Russian Federation means actions using objects of the Russian information infrastructure and (or) user equipment located on the territory of the Russian Federation, aimed at providing opportunities for the use of digital currency by third parties." In all other respects, regarding the organization of cryptocurrency issue and turnover processes, the law on CFA refers to federal laws that have not yet been adopted and are not part of Russian legislation, they simply do not exist: "The organization of issue and (or) issue, organization of circulation of digital currency in the Russian Federation are regulated in accordance with federal laws."

Which of the crypto regulation legislation is still unclear?

The current legislation, as well as the bills that are planned to be adopted, clearly characterize digital currencies as property, however, they do not include specifics in the regulation of digital tokens of various types that do not fall under the definition of digital financial assets. But it is likely that in a number of cases, some digital tokens, essentially not related to digital financial assets or digital currencies, can be characterized as a commodity, since many of them are created in order to raise funds and are actively traded on different platforms. Nevertheless, it cannot be said that the main characteristic of goods as property, which is created for the purpose of subsequent sale, fully characterizes such digital tokens, the types and purpose of which are very diverse today. Most likely, the answer to the question of what type of property should be attributed to them will be obtained over time, with the emergence of official explanations of the regulator represented by the Bank of Russia and the emergence of appropriate judicial practice. But even in this case, it is unlikely that it will be possible to achieve a uniform definition for all types of digital tokens, due to the variety of their nature and purpose.

So, at the beginning of February 2021, cryptocurrency, for example, bitcoin cannot pay for goods and services, but it can be purchased, changed, stored and sold, through exchangers, not forgetting to pay income tax. At the same time, none of the current laws of the Russian Federation establishes a single reporting form, and that this tax must be paid can be found only from letters from the Ministry of Finance of the Russian Federation No. 03-03-06/1/73953 and No. 03-03-06/1/73953: "The logic of the provisions of Chapter 25 of the Tax Code of the Russian Federation implies taxation of all income received by the taxpayer in the implementation of activities, with the exception of those named in Article 251 of the Tax Code of the Russian. Given the lack of a special procedure for taxing income received during operations with cryptocurrency in Chapter 25 of the Tax Code of the Russian Federation, these taxpayer incomes are taken into account when determining the tax base for income tax in general. "

Why are all these norms introduced and what are the trends of the new regulation?

As of February 2021, the listed restrictions exist only in the form of bills and are currently invalid. However, their active lobbying and prohibitive nature clearly illustrate the general negative attitude of state bodies towards the uncontrolled, in their opinion, turnover of digital currencies. Such an approach of the state to the regulation of cryptocurrencies is caused not only by concerns about their uncontrolled turnover, but also by the desire to replace them in circulation with their own so-called CBDC - Central Bank Digital Currency, that is, digital currency issued directly by the Central Bank. In some countries, this concept has already been successfully implemented - in particular, in China, where the central bank is already issuing a digital yuan. Back in 2017, the head of the Bank of Russia Elvira Nabiullina stated:

"The use of cryptocurrencies as money surrogates is actively proposed for settlement for goods and services. In our opinion, this has as a risk a undermining of monetary circulation, and, of course, we will not allow the use of cryptocurrencies as monetary surrogates. "

The overwhelming majority of experts are inclined to believe that such a restriction on the turnover of cryptocurrencies is just an initiative of the Bank of Russia, clearing the field for experiments with the digital ruble, which is confirmed by the Bank of Russia itself in one of the reports:

"The digital ruble will be an additional form of the Russian national currency and will be issued digitally by the central bank (Bank of Russia). In other words, the digital ruble will be the digital currency of the Russian central bank. "

Relatively interesting, but also potentially negative, is the tendency to literally force foreign companies to work only according to Russian rules. Thus, published on January 28, 2021, the List of Instructions following the meeting of the Council for the Development of Civil Society and Human Rights, the first paragraph obliges the Presidential Administration of the Russian Federation to prepare jointly with the Government of the Russian Federation by August 1, 2021 and submit proposals for establishing additional requirements for foreign technology companies, carrying out activities in the Russian segment of the information and telecommunication Internet, including in terms of opening representative offices of these companies in the Russian Federation. If such requirements apply to crypto site operators - and they are very likely to apply to operators of any online services - then, taking into account the "freedom of the crypto business as a whole, unjustifiably harsh measures can lead to a mass exodus of such companies from Russia. For this reason, the cryptocurrency community in Russia actively opposes the adoption of tough and vague regulatory measures, and continues to actively communicate with representatives of state authorities for clarification and mitigation of both current and proposed legislation.

2020

Central Bank introduces restrictions on the purchase of digital financial assets

At the end of December 2020, the Central Bank of the Russian Federation introduced a limit on the purchase of digital financial assets (CFA) by unqualified investors - companies and citizens who are not professional participants in the securities market. They will be able to purchase CFA in the amount of no more than 600 thousand rubles during the year.

Unqualified investors will be able to acquire CFAs if they certify the possibility of exercising rights to securities included in the quotation lists of exchanges (except for bonds, if these are not federal loan bonds or corporate bonds of the issuer with a rating not lower than the level established by the Central Bank of the Russian Federation). Also, unqualified investors will be able to buy such assets if they include monetary claims, the amount of which is equivalent to the value of the precious metals indicated in the issue of these CFAs.

The Central Bank of the Russian Federation also established a ban on the purchase of unqualified investors:

• CFAs intended for professional participants in the securities market (mutual investment funds, management companies, etc.)
• CFA issued on services covered by the legislation of foreign countries;
• CFA without indication in the decision on the release of the term of fulfillment of obligations.
• CFAs in which income generation depends on the occurrence or absence of any circumstances.

These requirements come into force on January 1, 2021.

Those wishing to invest large amounts can fulfill the conditions for recognizing them as qualified investors. To do this, you need to have money or securities in the amount of 6 million rubles or experience in working with securities/PFI or specialized education. If these conditions are met, the CFA release and exchange operators have the right to recognize investors as qualified simply at their request, so it will not be too difficult to raise the investment threshold, Dmitry Kirillov, senior lawyer of tax practice at Bryan Cave Leighton Paisner (Russia), a teacher at Moscow Digital School, explained to RBC.^[7]

Putin ordered officials to report on cryptocurrency ownership

On December 10, 2020, the president Russia Vladimir Putin signed a decree "On measures to implement certain provisions of the Federal Law" On Digital Financial Assets, digital currency and on Amending Certain Legislative Acts of the Russian Federation. " This document, which is published on the official Internet portal of legal information, among other things obliges officials and applicants for relevant positions to provide information about the ownership of cryptocurrency.

According to the decree, civil servants must provide notice of their digital financial assets, digital rights, "simultaneously including digital financial assets and other digital rights," utilitarian digital rights, as well as their digital currency. Also, officials must report on the digital assets of their spouses and minor children.

Civil servants will have to indicate in the declarations the type of digital currency - crypto assets and bitcoins, the date of the transaction for their acquisition, as well as the sources of funds for such purchases. The information must be provided by January 1 to June 30, 2021.

Federal government agencies, the Central Bank, local authorities and local governments, state extra-budgetary funds and state corporations when submitting declarations of officials on income and property will now need to take these requirements into account.

On December 8, 2020, the Prosecutor General of Russia Igor Krasnov announced that prosecutors would begin to track the digital assets of officials, which they should begin to declare from 2021.

The decree signed by Putin was developed in order to implement the provisions of the law on digital financial assets, which will enter into force on January 1, 2021. This law establishes the rules for the issue, accounting and circulation of digital financial assets (CFA), determines the features of relations arising from the circulation of digital currency in Russia.^[8]"

The Ministry of Finance has prepared a package of bills on digital currency

Undeclared cryptocurrency may threaten a prison term in the Russian Federation. This became known on November 12, 2020.

The Ministry of Finance of the Russian Federation has prepared a package of bills on digital currency, within the framework of which it is proposed to deprive the owners of undeclared cryptocurrencies of freedom. As provided for by the developed amendments on digital financial assets (CFA), owners of digital currencies can be imprisoned for up to three years if they at least twice in three years did not report to the tax authorities on these transactions in the amount of 45 million rubles. and more.

The ministry also developed amendments to the Tax Code, the so-called "anti-money laundering" law No. 115-FZ and the Code of Administrative Offenses in terms of regulating digital currencies and digital financial assets. The CFA includes digital analogues of debt receipts, shares, bonds and equity rights issued on the blockchain.

Compliance with these recommendations will reduce the number of transactions related to money laundering obtained by criminal means, - noted in the press service of the department.

Owners of crypto assets will be required to report to the tax authorities on the receipt of digital currency, on transactions with it and on its balances in a cryptocurrency wallet, if for a calendar year the amount of transactions with digital currency exceeds the amount equivalent in monetary terms to 600 thousand rubles.

For refusing to provide information to the tax authority on time, a fine of 50 thousand rubles is provided, and for providing illegal information - a fine of 10% of the amount of receipt or write-off of digital currency in ruble equivalent (the largest of the two). Failure to pay or incomplete payment of tax amounts shall result in a penalty of 40% of the unpaid tax amount in respect of such transactions.

For undeclared crypto assets on an especially large scale (for an amount equivalent to 45 million rubles or more, for three years), a fine is provided in the amount of 500 thousand to 2 million rubles, forced labor for up to five years or imprisonment for up to three years.

Administrative fines are also provided for organizing the illegal circulation of CFA - from 50 thousand to 500 thousand rubles. for citizens, from 100 thousand to 1 million rubles. for officials and from 200 thousand to 2 million rubles. for legal entities.

Officials in Russia were obliged to declare cryptocurrency

On October 20, 2020, the Prosecutor General of the Russian Federation Igor Krasnov, during a meeting of the prosecutors general of the member states of the Shanghai Cooperation Organization (SCO), announced that Russian officials would have to declare their cryptocurrencies.

Igor Krasnov noted that in July 2020, a federal law was adopted in Russia, which recognizes virtual currency for some areas of legal relations, including countering corruption, as property. At the same time, civil servants, starting from 2021, are obliged to declare such currencies on a par with other assets, he said.

In early September 2020, the governor of the Sverdlovsk region, Yevgeny Kuyvashev, ordered all local officials to report the presence of digital financial assets (CFA) and digital currency, the latter includes bitcoin and other cryptocurrencies. To do this, a document was signed that amends the decree regulating the control over the expenses of those who fill public positions.

In September, the Ministry of Finance of the Russian Federation prepared another package of bills to regulate the circulation of cryptocurrency. The main changes relate to the obligation of citizens to declare operations with cryptocurrency, as well as the content of crypto wallets.

The authors point out that attackers often use cryptocurrencies to evade taxes, as well as to legalize illegally obtained income. If the initiative is adopted, then crypto exchangers will be obliged to report to the Federal Tax Service (FTS) about all transfers in cryptocurrencies with the participation of Russian residents.

In 2018, the Ministry of Labor first mentioned virtual currencies with recommendations for declaring the income of officials. The document said that civil servants may not indicate such currencies in declarations. Such a norm will be valid until the end of 2020.^[9]

Ministry of Finance plans mandatory declaration of cryptocurrency

The Ministry of Finance has prepared a package of bills regulating the circulation of cryptocurrencies and the creation of wallets. The agency proposes to recognize digital currency as property that will be taxed. This became known on September 24, 2020.

We are talking about amendments to the Criminal Code, the Criminal Procedure Code, the Administrative Code, the Tax Code and the law on countering the legalization (laundering) of income. According to them, a citizen or organization that received more than 100,000 rubles in a calendar year of digital currency is obliged to report this to tax authorities and submit an annual report on transactions with such assets and their balances. For violation of this clause, a fine of 30% of crypto assets may threaten, but at least 50,000 rubles.

Cryptocurrency is often used for tax evasion, to legalize funds obtained by criminal means, and to finance illegal activities, the Ministry of Finance says.

It is proposed to introduce an obligation for exchangers to report to the tax authorities money transfers about funds and cryptocurrencies for transactions the Russian with users. They identification will be carried out by payment details bank cards and by the Russian IP address.

Refusal to declare a crypto wallet, if more than 1 million rubles have passed through it. per year, becomes a criminal offense up to three years in prison. Forced labor can also be used as punishment. In addition, the recognition of the use of cryptocurrency in the commission of crimes can be recognized as an aggravating circumstance.

The Ministry of Finance noted that as of September 2020, there are no final decisions on the regulation of digital currencies. World practice and FATF recommendations offer two options - controlled circulation or a complete ban.^[10] to^[11].

The Central Bank of the Russian Federation has set a limit for investments in cryptocurrency for the population

In October 2020, the Central Bank of the Russian Federation set a limit for investments in digital financial assets for the population. This, in particular, includes tokens and cryptocurrencies.

Individual entrepreneurs, individuals who are not qualified investors (hereinafter referred to as "persons"), may acquire within one year digital financial assets in the range of 600 thousand rubles transferred for their payment, and (or) the aggregate value of the 3 other digital financial assets being countersigned; and (or) acquire digital rights, including simultaneously digital financial assets and other digital rights, within 600 thousand rubles for digital financial assets and 600 thousand rubles for other digital rights transferred to their payment, - said in the document of the Central Bank, which will enter into force on January 1, 2021.

The Bank of Russia's structural division responsible for the development of the project is the Bank of Russia's Financial Technology Department.

The fact that the amount that will limit the investments of non-professionals in crypto assets is likely to amount to 600 thousand rubles, said RBC last spring, the head of the Duma Committee on the Financial Market Anatoly Aksakov. He indicated that the amount would correspond to the annual amount that unqualified investors can invest in accordance with the bill on crowdfunding platforms (entered into force in January 2020).

The limit set by the Bank of Russia on the amount of purchases of digital financial assets will limit the number of Russians who will be able to participate in such transactions, Arseny Poyarkov, head of the BusinessDrom analytical center, a member of the State Duma's expert council on digital economics, told RIA Novosti.

The threshold of 600 thousand rubles is unexpectedly large, this is one and a half times more than the deduction threshold for an individual investment account. Only a few percent of the population can buy digital assets in this volume, "Poyarkov said[12][13][14] assets

Cryptocurrency in Russia has an official definition

On July 22, 2020, the State Duma finally (in the third reading) adopted a law on digital financial assets (CFA) and digital currency. It defines the concept of cryptocurrency, but prohibits its use to pay for goods and services.

According to the law, a digital currency or cryptocurrency (for example, bitcoin) is "a collection of electronic data (numeric code or designation) contained in the information system, which are proposed and (or) may be accepted as a means of payment, which is not a monetary unit of the Russian Federation, a monetary unit of a foreign state; (or) an international monetary or settlement unit, and/or as an investment and in respect of which there is no person obligated to each holder of such electronic data. "

Digital assets are, in simple words, securities placed through the blockchain, explains Mikhail Uspensky, Deputy Chairman of the Board of the Chamber of Tax Consultants of the Russian Federation, who took part in the discussion of the bill. We are talking about tokens that are needed not for accumulation or calculation, but for non-financial exchange of goods and services, explained Forbes head of ANO "Digital Platforms" Arseny Shcheltsin.

The explanatory materials to the law say that the key difference between the CFA and digital currencies is that there is always an obligor in relation to the CFA, there is no obligor in relation to the digital currency. CFA, as a type of digital law, is an object of civil rights and in this regard acts as a legal object of civil law transactions. Digital currency is not directly recognized as an object of civil law. CFAs can be the object of purchase and sale transactions, they can be exchanged, transferred as collateral.

During the work on the text, the deputies for the second reading removed some concepts from it, for example, "mining" and "tokens."^[15]

The State Duma adopted a law on digital financial assets

On July 21, 2020, the State Duma adopted in the second reading a bill on digital financial assets (CFA). The Digital Financial Assets Act is due to come into force on January 1, 2021.

In general, the bill is aimed at regulated blockchain-based information systems, describes the ability of enterprises and financial institutions to release digital financial assets (CFAs) and regulates their circulation. The bill also defines the CFA and establishes requirements for the information system within which the CFA is issued, as well as for the operator of this system and the exchange operator of the CFA.

The requirements to the decision on the issue of CFA, to their accounting and circulation, to the activities of the operator of the information system in which the CFA is issued, to the activities of the exchange operator of the CFA are determined; rules for exchange of CFA and the procedure for their approval.

At the same time, the document does not apply to the circulation of non-cash and electronic funds, as well as to the issue, accounting and circulation of non-documentary securities.

{{quote 'author
= - said Anatoly Konkin, head of the department "Development of distributed register technology" of the FinTech Association^[16]|"The adoption of the law on CFA is an important step for the development of distributed register technology and blockchain in Russia. Distributed registry systems in the Digital Economy program are highlighted as an "end-to-end" technology that radically changes the situation in existing markets and contributes to the formation of new ones. The state plans to allocate more than 36 billion rubles for the development of blockchain. By the end of 2024.

The CFA law defines the functioning of the asset market, which significantly expands the capabilities of the securities market. At the same time, blockchain provides a number of advantages over classical securities instruments, allowing significantly reduced costs. The use of distributed registry technology provides information security and the ability to monitor the release and further status of assets in real time. In addition, the bill spelled out the duties and responsibilities of the information system operator, where digital assets are issued and exchanged, this ensures the legitimacy of the entire process and insures its participants against possible risks.

With the advent of the law, large financial market participants will be able to start using technology to create new financial products. Legal entities - from large corporations to small businesses - a convenient way to raise funds, the population - a more profitable investment tool, "}}

Cryptocurrency can be bought on foreign sites and declared in the Russian Federation - Aksakov

The State Duma, along with the bill on digital financial assets, which has been stuck in the first reading since May 2018, has begun discussing another document - the bill "On digital currency in the Russian Federation," Anatoly Aksakov, head of the Duma committee on the financial market, told Interfax in May 2020.

"Now we are working on a bill on digital currency in the Russian Federation, which gives a real definition of cryptocurrency in the Russian legal space. This is a currency that is used as a means of payment and as a means of savings. A requirement for its handling is established. The most important requirement: in the Russian legal space, the organization of the issue and circulation of such currencies cannot be ensured. You can buy it (cryptocurrency), but on foreign sites. On the territory of the Russian Federation, sites, exchanges that allow you to acquire these crypto tools within the Russian legal space cannot function, "said the head of the committee.

According to him, the currency purchased at foreign sites should be declared in the Russian Federation, it is defined as property. "Accordingly, having declared, market participants receive judicial protection within the framework of the Russian legal space, and judicial protection will just act with this instrument, defining it as property, property rights," he said

At the same time, according to the head of the committee, amendments will be made to the Criminal Code (Criminal Code), which introduce responsibility for an attempt to establish the work of crypto exchanges in the Russian Federation. "We are considering the issue of criminal prosecution, if there is an attempt to organize, an attempt to imitate, organize the appropriate infrastructure for the circulation of these bitcoins, ethers, all crypto tools created outside the country," he said.

Russia will begin to plant cryptocurrencies for circulation

For organizing the illegal circulation of digital financial assets (CFA) and digital currencies, making transactions with them, including with foreign CFAs and digital rights (includes CFA and other rights), or for the provision of services for the issuance of digital rights and digital currency using sites registered in Russia, or technical means located in the country - individuals will face a fine of 50 to 500 thousand rubles.

For the same violations of officials, it is proposed to fine 100 thousand - 1 million rubles or disqualify for up to one year; legal entities are fined from 200 thousand to 2 million rubles.

For violation of the rules for making transactions with the CFA, digital currencies and rights, if they are used as a payment for goods, provided works or services, the confiscation of assets is threatened, as well as a fine - from 20 to 200 thousand rubles. for individuals, from 50 to 400 thousand for officials and from 100 thousand to 1 million - for legal entities.

Criminal violations are proposed to include the same acts if they caused large or especially large damage, or led to the extraction of large or especially large income.

For especially large damage or extraction of especially large income, it is proposed to punish forced labor up to five years or imprisonment up to seven 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 five years.

The package of bills contains a complete ban on cryptocurrency in the country, including mining and subsequent circulation, and amendments to the Code of Administrative Offenses and the Criminal Code suggest the illegality of not only circulation, but also the possession of tokens issued in foreign jurisdictions by Russian individuals and legal entities.

Russia will ban the release and circulation of cryptocurrency

On March 16, 2020, the Вести.ru reported that Russia would ban the release and circulation of cryptocurrency. The release and circulation of cryptocurrency in Russia carry an unjustified risk, noted in the bill on digital financial assets (CFA). The bill provides for a ban on the issuance and circulation of cryptocurrency in Russia, introduces liability for violation of the ban.

The position of the Bank of Russia remains unchanged. We believe that there are great risks in legalizing the circulation of cryptocurrency. " Risks arise for financial stability and the system of countering income laundering, consumer protection will also suffer, noted in this regard the head of the legal department of the Central Bank Alexey Guznov

The Central Bank objected to legitimizing cryptocurrency as a "tool" and object of circulation, Guznov emphasized.

Some experts suggested considering cryptocurrency as a foreign currency and regulating its issue and circulation in the same way, that is, applying the rules of legislation on currency regulation and currency control to cryptocurrency.

Authorities responded that they did not intend to ban digital currency ownership. The bill prohibits only the issuance and circulation of cryptocurrency and introduces liability for violation of this ban.

The Central Bank opposed institutions that would establish the issuance of cryptocurrency and contribute to its circulation.

But if a person who owns conditionally bitcoins makes his transaction in a jurisdiction that does not prohibit this, it is unlikely that we will be able to limit him in this, specified Guznov

However, there is no such opportunity in Russia.

Here the problem is that the right that developed until recently is the right primarily national. What we face is extraterritorial regulation of relationships. The presence of cryptocurrencies is also in many ways extraterritorial. It is important that legal regulation in Russia does not impede the development of modern technologies. There are certain chances to reach the text that will allow the bill to pass, concluded[17]

2019

Supreme Court of Russia: digital tokens can be regarded as a bribe

Digital rights (tokens) can be regarded as a bribe in Russia. The Supreme Court of the Russian Federation introduced the corresponding explanation into the resolution of the plenum of July 9, 2013 "On judicial practice in cases of bribery and other corruption crimes."

According to the TASS Information Agency of Russia, from October 1, 2019, the concept of "digital law" began to operate in the Civil Code (GC). The concept was introduced instead of the term "token," which originally denoted an identification device, and then began to be used to denote ciphers, the possession of which gives certain opportunities on the network, including the transfer of virtual objects into tangible values ​ ​ in the future.

At the same time, the authors of the new article of the Civil Code explained that digital rights are recognized only in cases provided for by law, and in order for this concept to work in practice, it is necessary, in particular, to register in the law "On information, information technologies and information protection" signs of a decentralized information system.

In a conversation with RBC, the managing partner of the EBR law firm, co-founder of the Moscow Digital School, Alexander Zhuravlev, called the position of the Supreme Court that tokens can be the subject of a bribe true and relevant. According to the expert, the Ministry of Labor needed back in 2018 to oblige officials to declare cryptocurrency and tokens in order to suppress the possibility for unscrupulous persons to receive bribes in cryptocurrency.

Taking a bribe in cryptocurrency is still possible and has not been fully settled, since at the moment it is not clear whether the concept of cryptocurrency falls under the concept of digital law, "said Ekaterina Ippolitova, a lawyer at Asnis & Partners, deputy chairman of the Commission on Legal Support of the Digital Economy at the Moscow branch of the Russian Bar Association.[18]

In Russia, they want to plant for 8 years to pay for purchases with bitcoins

On November 29, 2019, it became known that the Central Bank and Rosfinmonitoring are preparing an initiative to ban the use of cryptocurrency to pay for purchases in Russia.

So far, punishment for receiving fees or paying for goods and services using digital money in Russia is not provided. However, according to Izvestia sources, criminal liability may also be introduced with a ban with terms of up to 5-8 years in prison.

The information about the preparation of the initiative was not confirmed by the Central Bank, but noted that they were ready to support it. The Ministry of Finance takes the same position.

We do not see any prerequisites for cryptocurrencies to be used as a means of payment, "said Alexei Yakovlev, deputy head of the banking regulation department of the Ministry of Finance, at a round table on the development of crypto-economics in Russia and the world.

Alexander Zhuravlev, managing partner of the EBR law firm, considers the ban on the use of cryptocurrency as a payment instrument to be an expected step from the Central Bank. According to the expert, it is first necessary to determine the legal nature of cryptocurrency, and the final understanding of the status of digital money will be after the adoption of the bill "On CFA."

It is expected that the initiative of the Bank of Russia and Rosfinmonitoring will have to fight crime in the field of virtual money, however, according to Antonina Levashenko, head of the Center for Russia - OECD RANEPA, this will not help destroy the "gray" sector, but will only deprive the budget of taxes from operations with cryptocurrencies.

One of the representatives of the Russian crypto community, in a conversation with Izvestia, said that, although there are rumors of criminal liability for the use of cryptocurrency, the authorities are likely to limit themselves to a small number of indicative cases.^[19]

The board of the Ministry of Internal Affairs instructed to develop a mechanism for confiscating cryptocurrency

On November 7, 2019, it became known that after the meeting held on November 1, 2019, the Board MINISTRY OF INTERNAL AFFAIRS RUSSIAN FEDERATION instructed the relevant departments to develop a legal mechanism for the seizure of virtual assets, in particular, cryptocurrencies for their confiscation. By December 31, 2021, the Ministry of Internal Affairs,,,,, and the Rosfinmonitoring State Office of Public Prosecutor Investigative Committee FSB must submit their proposals Ministry of Justice with FCS FSSP participation. Supreme Court

As of November 2019, the legal status of cryptocurrency in Russia has not been determined, therefore, in order for it to be confiscated, cryptocurrency must be recognized either as a monetary equivalent or a commodity. Since 2017, a bill on digital financial assets (CFA) has been being developed to regulate the cryptocurrency sector in Russia. The document was adopted by the State Duma in the first reading in May 2018, but since then it has still been preparing for the second reading.

The CFA bill is intended to regulate the issue, accounting and circulation of digital financial assets. According to the document, digital analogues of debt receipts, bonds and equity participation rights issued through the blockchain should be considered as such. The bill also introduces the concept of "digital currencies," but does not give this term an unambiguous definition.

According to experts, the development of mechanisms for confiscating cryptocurrency actually means its legalization. Nevertheless, in international and even in Russian practice, there have already been repeated cases of confiscation of cryptocurrency by court decision in the absence of legislation regulating it.

Confiscation of cryptocurrency by a court decision can theoretically be introduced in Russia. However, in this case, technical difficulties with access to cryptocurrency wallets are inevitable. Law enforcement officers will have to not only somehow get the accounts data of the owner of the wallet, they will also need to prove that the wallet belongs to this particular person.

Following the meeting on November 1, the Board of the Ministry of Internal Affairs also instructed to develop effective methods for blocking the cellular signal in prisons and decided to create a unit in its structure to combat cybercrime^[20] for ^[21].

Russian crypto exchanges will be allowed to trade in foreign crypto assets

On November 1, 2019, it became known that Russian crypto exchanges would be allowed to trade in foreign crypto assets. Trade bitcoins and others cryptocurrencies will remain banned.

Foreign crypto assets are digital analogues of debt receipts, bonds and equity participation rights, that is, tokens.

A new version of the bill "On Digital Financial Assets" (CFA) was prepared for the second reading in the State Duma, RBC reports.

In accordance with the project, not only individual entrepreneurs and legal entities, but also foreign firms will be able to issue tokens within the framework of Russian law, but only within a certain information system.

Only legal entities operating under Russian law and included in a special register, which will be under the control of the Bank of Russia, will be able to act as operators of such IT systems. In fact, credit organizations and depositories included by the Central Bank in the register will be able to become operators.

The authors of the bill initially proposed to consider the CFA any rights formalized through the blockchain, including property or real estate, but by the second reading such a proposal was removed from the bill.

The bill contains the concept of "digital currencies." They mean "a set of electronic data (digital code or designation) used in information systems and offered as a means of payment." In this case, the means of payment is not an official monetary unit of Russia, a foreign state or an international monetary or settlement unit. They cannot be released and used in information systems that are used to issue digital assets.

The head of the blockchain integrator Sputnik DLT Artem Tolkachev believes that the bill completely removes existing cryptocurrencies from its jurisdiction and regulates only digital rights, as well as certain digital currencies that can be created in coordination with the Central Bank in information systems.^[22]

Cryptocurrency owners in Russia may lose anonymity

On September 12, 2019, it became known that the Association of Banks of Russia (ADB) had prepared a concept for the turnover of decentralized cryptocurrencies, which would deprive the owners of virtual digital assets of anonymity. This position was voiced by the vice-president of the ADB Anatoly Kozlachkov.

The concept assumes the possibility of collecting digital assets within the framework of enforcement proceedings, in taxation or bankruptcy. Funds may be confiscated in favor of a credit institution that issued a loan to a market player. Ownership of cryptocurrency will be established using court decisions.

"The model assumes that at the request of the lender, market agents will be able to provide services to establish the owners of digital assets. This will enable creditors, within the framework of the judicial procedure, to establish the fact that digital property belongs to a specific person, " noted Anatoly Kozlachkov, ADB vice-president

The identification of the owner of the cryptocurrency is important, since the court, when making a decision, needs to have all the information about this person, including data on the number of tokens and the password from crypto-applet wallets. If the holder of digital assets refuses to provide such information, then ADB proposes to introduce criminal punishment against this person. This legal model will ensure the protection of transactions with virtual assets, as well as reduce the risks associated with anonymity.

ARB also proposes to introduce taxation of transactions with cryptocurrencies when paying for goods and services. Fees are also proposed to be introduced from transactions for the purchase and sale of tokens. The tax collection system will be similar to the one that applies to investors in the securities market. It is also proposed to introduce norms in tax legislation, according to which individuals will be required to declare the purchase of cryptocurrency and pay taxes after its sale.

"Such a legal model will allow, on the one hand, to take away the tool from cybercriminals, and on the other, it will make it possible to legally use the tool and pay taxes."[23] noted Anatoly Kozlachkov, ADB vice-president

The State Duma adopted in the second reading the bill "On Digital Rights"

On March 6, 2019, it became known that the State Duma adopted in the second reading the bill "On Digital Rights." The bill is an upper-level document: it is an amendment to the Civil Code (GC), the purpose of which is to introduce basic concepts for the functioning of the digital economy.

The bill was developed in 2018 by the Chairman of the State Duma Vyacheslav Volodin and the head of the parliamentary committee on state construction and legislation Pavel Krasheninnikov. The bill was approved on first reading in May 2018, but then underwent significant changes.

In the version submitted to the second reading, "digital rights" (analogue of tokens) means "binding and other rights, the content and conditions of which are determined in accordance with the rules of the information system that meets the characteristic established by law." Transfer, pledge, encumbrance and other disposal of digital rights are possible only in the information system without contacting a third party.

The holder of digital law is a person who, in accordance with the rules of the information system, has the opportunity to dispose of them. The transition of digital law on the basis of a transaction does not require the consent of the person obliged under such digital law.

The previous version of the bill said that digital rights function in an information system that meets the characteristics of a decentralized information system established by law. That is, this kind of system was supposed to work on blockchain technology.

The presented bill assumes that a written transaction can be carried out using electronic and other technical means that allow reproducing the contents of the transaction on a material medium in an unchanged form. In this case, the requirement for the presence of a signature is considered fulfilled if any method is used that allows you to reliably determine the person who expressed the will.

The law, other legal acts and agreement of the parties may provide for a special method of reliable determination of the person who expressed the will, as well as additional requirements that the form of the transaction must comply with and provide for the consequences of non-compliance with these requirements.

These requirements for written transactions will also apply to written legally significant communications. Subject to these requirements, the decisions of meetings of participants at which voting was carried out using electronic or other similar technical standards will have legal significance.

The Agreement may be concluded in writing by making one document signed by the parties, including electronic, or by exchanging letters, telegrams, electronic documents or other data meeting the specified requirements for a written transaction.

Similarly, a nominal account contract and an insurance contract can be concluded. At the same time, making a will using electronic or other technical means is not allowed.

The bill legalizes smart contracts, although this very concept is not used in the document. According to the bill, "the terms of the transaction may provide for the fulfillment by its parties of obligations arising from it upon the onset of certain circumstances without a separate additional expression of the will of its parties aimed at fulfilling the obligation by using information technologies determined by the terms of the transaction."

In terms of working with big data, it is said that the contract, by virtue of which the contractor undertakes to perform actions to provide certain information to the customer (agreement on the provision of information services), may provide for the obligation of one of the parties or both parties not to perform within a certain period of action, as a result of which information can be disclosed to third parties.

At the same time, the chapter on "digital money" (cryptocurrencies) was excluded from the bill, compared to its original version. Pavel Krasheninnikov recalled that in 2018, when the bill was introduced, "this thing was quite promoted." Krasheninnikov still believes that cryptocurrencies in some cases can be objects of inheritance of the bankruptcy and bankruptcy mass, but in the absence of universal norms, it was decided not to register this issue in the Civil Code.

The head of the Russian Association of Crypto Industry and Blockchain (RAKIB) Yuri Pripachkin believes that the bills considered by the State Duma on this topic do not solve the problem of preparing comprehensive legislation, which would describe the entire set of business relations already taking place between participants in the cryptocurrency market.

"The amendments adopted in the Civil Code do not contain definitions digital money of smart contracts - key concepts for crypto economics. The presence of concepts established in the market and used in international business relations is a prerequisite for the development of the crypto industry in our country. In the absence of such definitions, participants in the decentralized market will not be able to work effectively the Russian within the jurisdiction and will be forced to build their business in other countries. " Yuri Pripachkin

RF Armed Forces recognized cryptocurrency as one of the means of money laundering

On February 26, 2019, it became known that the Supreme Court introduced the concept of "cryptocurrency" in the ruling ​po cases of money laundering.

The plenum clarified that Art. 174 and 174.1. The Criminal Code on the legalization of criminal proceeds should apply to cryptocurrency. The subject of crimes may be, among other things, "funds converted from virtual assets (cryptocurrency) acquired as a result of committing a crime," according to the updated version of the resolution of the plenum of the Armed Forces.

As specified in the decision of the plenum, the changes are being introduced in connection with the recommendations of the FATF (Financial Action Task Force, the international Financial Action Task Force money laundering).

From March 11 to March 29, Russia will be visited by the FATF mission, which should assess the effectiveness of combating the laundering of illegally received income and the technical compliance of the country with 40 recommendations of this organization. According to the results of the previous assessment of 2008, FATF experts identified a number of shortcomings (including improper transparency of information about beneficial owners), which led to the regular monitoring.​ of Russia. In September 2014, the country was removed from the regular monitoring procedure until the next mutual assessment.

According to the materials of Rosfinmonitoring to the project of the Mutual Assessment of the Risks of Money Laundering in Russia for FATF, the inspectors of the international organization asked the Russian side whether the concept of "property" includes virtual assets for the purpose of money laundering, and if so, what category they belong to - "funds" or "other property."

In response, Rosfinmonitoring said that the lack of legislative regulation and state supervision over the issuance and circulation of virtual currencies is considered among the main vulnerabilities in the Russian economy. According to financial intelligence, in recent years "the use of cryptocurrencies for the sale of narcotic drugs and the subsequent laundering of criminal proceeds has been noted."

As of February 2019, in Russia, "the legal status of virtual assets has not been determined," the document says. At the same time, law enforcement agencies have the practice of identifying, documenting and investigating crimes under Art. 174.1 of the Criminal Code, committed using crypto assets in settlements for drugs. According to the special services, 104 criminal cases were investigated by police investigators for 2017-2018 (27 in 2017, 77 in 2018). Of these, 51 cases were completed and sent to the court (in 2017 - 17, 2018 - 34).

As an example, Rosfinmonitoring cited an investigation by the Drug Control Department of the Ministry of Internal Affairs in Chuvashia. The police managed to identify an organized criminal group that, between June and November 2015, sold drugs of synthetic origin in a "contactless way" - through the Daffy Duck online store. Customers of drug dealers paid for the goods using an electronic payment system, followed by conversion to cryptocurrency bitcoin through the exchange Exmo.com. In the future, the money was withdrawn to settlement accounts opened on dummies in order to cash out.

Criminal cases were initiated on the fact of the crime, including under paragraph "a" of Part 4 of Art. 174.1 of the Criminal Code, and in April 2017 a court verdict was passed, according to which members of the group were sentenced to imprisonment for a total period of six to 13 years. Directly for the legalization of criminal proceeds - two years in prison.

In another unnamed region, police officers, while accompanying a criminal case on drug trafficking on an especially large scale (part 4 of article 228.1 of the Criminal Code), found that from February to March 2017, the accused took payments in cryptocurrency bitcoin as a drug payment, which he then transferred to a bank account. Thus, the man legalized 281 thousand rubles received from drug trafficking. He was also charged under Part 1 of Art. 174.1 of the Criminal Code, and in August 2017 a verdict was passed, according to which a sentence of 11 years in prison was imposed (under Article 174.1 of the Criminal Code - two years).

As of February 2019, in connection with the commission of crimes using cryptocurrencies, despite the uncertainty of their legal status in Russian legislation, in fact, they are actually equated with property (in accordance with the purposes of using cryptocurrencies) and are identified in monetary terms.

We are talking about improving the practice of applying legislation on countering the legalization of criminal proceeds in accordance with existing realities, explained Denis Frolov, head of commercial practice at BMS Law Firm.

The position expressed by the Russian Armed Forces is a call for the formation of a unified practice in such cases. This is unlikely to somehow affect the usual use of cryptocurrencies (outside of criminal cases). If money laundering occurs through the use of cryptocurrency, it is logical that these actions should fall under Art. 174.1 of the Criminal Code. Moreover, law enforcement agencies are already using this article in cases of using cryptocurrency to launder criminal proceeds.

According to the lawyer, it does not matter how the legalization of criminal proceeds takes place - investing in business, in real estate, making films, etc.

Technically, it is impossible to seize bitcoin or other cryptocurrency within the framework of a criminal case, but the investigator can seize a "computer, server, piece of paper" containing a password for entering a crypto wallet, says Maxim Melnichuk, a member of the expert council on digital economy and blockchain technologies in the State Duma, founder of the SPEKTR club of security officials.

To initiate criminal cases, the presence of the main compositions of articles of the Criminal Code (174.1, 159, 228, etc.) is more important, cryptocurrency complements the main article on the legalization of income, fraud, drug sales, and is not the basis for criminal prosecution. When detaining a drug dealer, he is charged with Art. 228 of the Criminal Code, even if he sells for crypt - an article in any case for the sale of narcotic substances; also, if a withdrawal of funds is detected, the case is initiated under Art. 174 of the Criminal Code, and the method - through the purchase of bitcoins.

Melnichuk also recalled that two bills on the circulation of digital assets ("On Amendments to Parts 1, 2 and 4 of the Civil Code" and "On Digital Financial Assets") were submitted to the State Duma, which are trying to regulate the circulation of cryptocurrencies.

But they were criticized from all sides, since the very concept of cryptocurrency is not fully defined - this is definitely not a means of payment in Rossii​, but rather a digital asset. Also, the legal status of market participants in such assets, the amount of their rights and obligations, as well as liability for non-compliance with the future law, is not determined.

The ruling of the Supreme Court is likely to have a slight impact on the volume of cryptocurrencies in the Russian economy, said Anna Mikhailova, an analyst at the ACRA sovereign ratings and forecasting group.

The more cryptocurrency is regulated and appears in various official documents, the faster it will become a household item for the masses. Until a law on its legal regulation is adopted, it is difficult to talk about widespread adoption.

Mikhail Zhuzhalov, a lawyer at Deloitte Legal in the CIS, believes that the effect of the decision of the plenum of the Armed Forces will be more positive than negative.

The document published on the website of the RF Armed Forces allows us to believe that the Armed Forces is just preparing to recognize cryptocurrency as property, the turnover of which is not limited or prohibited. In particular, if cryptocurrency were recognized as prohibited, it would be mentioned in another provision of the resolution, according to which Art. 174, 174.1 of the Criminal Code affect the disposal of funds received from the transformation of property limited in circulation. The next clarification indicates that cryptocurrency can be recognized as property acquired as a result of a crime, and not property limited in circulation.

Changes are possible in the medium term. Digital money is most likely used for unauthorized transfers of funds abroad and by persons conducting shadow or penumbral businesses, says Mikhailova. For these persons, in the short term, there are opportunities for cash conversion of cryptocurrencies or the use of international exchanges and shadow Internet for this, and in this regard, something is unlikely to change, she believes.

The fact that cryptocurrencies are used in gray, retail drew attention. Bank of Russia In the summer, the regulator called Russian markets - the shopping center "" (Lyublino), Moscow the Sadovod shopping center (in the southeast of the capital, near the Moscow Ring Road) and Food City (Kaluga highway, New Moscow) - "pioneers and leaders on the proposal to buy cryptocurrencies." According to Yuri Polupanov, Director of the Financial Monitoring and Currency Control Department of the Central Bank, cryptocurrency is acquired in such markets for a significant part of revenue, which is not taken into account anywhere and is sent through email merchants and producers to their homeland, where it is converted into local currency.

The market value of the cryptocurrency, which is in Russians, as of the first quarter of 2018, ranged from $7.5 billion to $14 billion (from 500 billion to about 900 billion rubles), according to a study by the Russian rating agency ACRA. At the same time, the share of those who invested in cryptocurrency in order to diversify the portfolio as an alternative investment asset or due to the increased popularity of cryptocurrencies is extremely small, says Mikhailova.

The low attractiveness of cryptocurrency for investments is due to the fact that it does not perform any of the functions of money, as it is characterized by increased volatility (according to the agency's calculations, the annual bitcoin volatility index is 92%). The digital currency cannot maintain its value in time, does not have collateral in the form of a real asset and does not have a guarantee of its relevance and value in the future - not every country recognizes cryptocurrency as a means of payment, the ACRA report said^[24]

2018

Cryptocurrencies quit digital asset bill

On September 19, 2018, it became known that the latest version of the bill "On Digital Financial Assets" (CFA) does not contain the concept of "cryptocurrency," and mining is defined only as the issuance of tokens to attract investments in capital. The bill does not regulate transactions with cryptocurrencies, explained the executive director of Sputnik DLT Artem Tolkachev, who was involved in the discussion of the bill as an expert from the industry. Now only token operations have become the subject of regulation. The latter can either confirm the rights to property and participation in the capital of the company, or play a technical role in the purchase and circulation of digital assets.

The latest version of the document does not answer the question of when cryptocurrencies will be legalized in Russia. The state is trying to neutralize the risks associated with cryptocurrencies, but because of this it leaves the market with minimal opportunities for development. This calls into question the transfer of the crypto business to Russia and its legalization here, the expert emphasized.

Russian and foreign companies and individuals registered as individual entrepreneurs can issue tokens. To do this, you need to prepare a special decision on the issue. It is important that the issuance of tokens should be provided with the property of the issuer or third parties, the bill says.

The placement of the CFA will take place at special sites that should receive a license from a professional participant in the securities market and be included in a special register of the Central Bank. Such an exchange is obliged to identify and maintain customer records. She will also have to provide access to this data at the request of government agencies or the bankruptcy trustee.

Separately, the operator for the exchange of digital assets responsible for the sale and purchase transactions will be determined. CFA will be allowed to exchange for rubles, foreign currency or other tokens ^[25]].

The State Duma of Russia adopted the law "On Digital Financial Assets"

The State Duma of Russia adopted the law "On Digital Financial Assets," which introduces such concepts as cryptocurrency, mining, token, smart contract, token issuance procedure. The law assumes that cryptocurrencies will not be legal tender on the territory of Russia^[26]

By analogy with a similar law in Belarus, you can exchange tokens for rubles only through special operators. We are talking about the creation of special crypto exchanges. At the same time, tokens and cryptocurrencies will be considered property in Russia.

Cryptocurrency mining is becoming entrepreneurial.

The Bank of Russia will set the standards for the purchase of cryptocurrencies by people who are not experts.

Arbitration Court of Appeal in Russia recognized cryptocurrency property

The Ninth Arbitration Court of Appeal in Moscow recognized cryptocurrency property. Previously, cryptocurrency was considered a set of symbols by the court and was not subject to transfer. The court decision notes that cryptocurrency is not considered legal tender^[27] Court^[28].

"At the time of this court session, it is cryptocurrency money as such or it is a money surrogate, cryptocurrency should be considered property, fiduciary (fiat) money, electronic money, currency, financial instrument or securities, the concept and legal nature of cryptocurrency in the legislation of the Russian Federation is not defined, the relevant changes to the legislation must be made by July 1, 2018," the document says.

"At the same time, the conduct of operations by Russian citizens and organizations using cryptocurrency is not prohibited by the laws of Russia. However, a fundamental feature that distinguishes crypto money from money as such is the way they arise in the digital space. So, real means of payment must first be deposited into a certain account or electronic wallet, and cryptocurrency units appear already in electronic form, "the court decision says

.

At the same time, the court decided to fate cryptocurrency as the property of the debtor and transfer it to pay off the debt. This is the first decision of the judicial body in Russia, which, in fact, legalizes the use of cryptocurrency.

Bill on the introduction of the concepts of "digital law" and "digital money"

As it became known at the end of March 2018, a draft federal law "On Amendments to Parts One, Two and Four of the Civil Code of the Russian Federation" was submitted to the State Duma, which creates the basis for regulating legal relations within the framework of the digital economy.

In general, the bill is intended to consolidate several basic provisions in the Civil Code that will allow regulating the market for new objects of economic relations ("tokens," "cryptocurrency," etc.), provide legal conditions for making and executing transactions in the digital environment ("smart contracts," "self-executing" transactions, etc.) and provide protection to citizens and legal entities for such transactions. Read more here.

Cryptocurrency bill

In March 2018, the State Duma introduced a bill "On Digital Financial Assets," regulating the status and use of cryptocurrencies in Russia. You can get acquainted with the document on the website of the Automated Legislative Support System. The bill was introduced by a group of parliamentarians led by Anatoly Aksakov, head of the State Duma Committee on the Financial Market^[29].

The bill assigns to cryptocurrencies and tokens the status of digital financial assets, while denying them the status of legal tender. Digital assets can be exchanged for rubles or foreign currency. Such transactions will be able to be carried out only by special operators - legal entities with the authority to carry out the types of activities listed in the laws "On the securities market" and "On organized trading."

Operations with cryptocurrencies will be carried out using digital records and digital transactions - these concepts are also introduced by the bill, as well as the concepts of the register of digital transactions and the distributed register of digital transactions. The distributed register can be accessed through a digital wallet that is opened by the operator.

The purse is only opened after the operator carries out identification of its owner to eliminate cases of money laundering. The concept of a validator is also introduced - a person who is engaged in confirming the authenticity of records in a distributed register, that is, their validation.

In addition, the bill introduces the concept of mining - activity on the consciousness of cryptocurrency or receiving it as a reward. "Mining is recognized as entrepreneurial activity in the event that the person who carries it out exceeds the energy consumption limits established by the Government of the Russian Federation for three months in a row," the bill says.

Selling tokens

The distinction between cryptocurrencies and tokens is carried out by the number of issuers: tokens are issued by one company, cryptocurrency is mined by many miners. During the primary offer (ICO), tokens can be purchased not only by qualified investors, but also by ordinary citizens. The maximum amount by which they can be purchased in one hand should be determined by the Central Bank, it is not spelled out in the bill.

The bill establishes the procedure for conducting the initial proposal of tokens. The issuer must issue a public offer and an investment memorandum, which will reflect information about the company and the terms of the token offer. In order to counter money laundering through the ICO, the public offer must include information about the beneficial owner of the issuer.

Token transactions made during the ICO are recorded using smart contracts. Smart contracts are recognized in the bill as a legal type of contract, which is electronic and executed using digital technologies.

The Ministry of Finance presented an updated bill "On digital financial assets"

In January 2018, the Ministry of Finance presented an updated version of the bill "On Digital Financial Assets." Concepts related to the financial side of the implementation of blockchain technology (critical currency, token, mining, etc.) will receive legally significant definitions in Russia.

These assets, directly related to cryptocurrency and tokens, are described in the document as electronic property created using encryption (cryptographic) means. Ownership of them is verified by making entries in the register of digital transactions. "Digital financial assets are not legal tender in the Russian Federation," the bill emphasizes.

According to the plan of the Ministry of Finance, cryptocurrency and tokens in our country legally can only be changed with money or other digital assets. Such an exchange without restrictions will be able to carry out only specialized legal entities that comply with the federal laws "On the securities market" and "On organized trading."

Individuals (unskilled investors) will independently be able to purchase tokens in the amount of no more than 50 thousand rubles within one issue. They will be allowed to do this only by crediting tokens to a special account tied to the electronic wallet of a legal operator (the aforementioned specialized legal entity).

In general, the upcoming law is designed to regulate relations that arise when creating, issuing, storing and circulating digital financial assets, as well as exercising rights and fulfilling obligations under smart contracts.

According to the letter of the bill, mining (the creation of cryptocurrency) will be considered entrepreneurial activity. A smart contract is defined as an electronic contract, "the fulfillment of rights and obligations under which is carried out by automatically performing digital transactions in a distributed register of digital transactions in a strictly defined sequence and upon the occurrence of circumstances defined by it."

Operators will be able to open digital wallets only after passing identification procedures in accordance with the federal law "On countering the legalization (laundering) of proceeds from crime and the financing of terrorism."

The procedure for issuing tokens by law will have to consist of specific stages: publication by the issuer on the Internet of an offer, investment memorandum and other documents, conclusion of contracts, including in the form of a smart contract aimed at alienating and paying tokens by their purchasers.

The mentioned public offer on the issuance of tokens should contain information about the issuer and its beneficiary (beneficiary) - the full name, the location of the permanent executive body, the official website on the Internet.

Similar norms are established for the so-called validators - legal entities and individuals that are participants in the register of digital transactions and carry out activities to validate digital records in the register of digital transactions^[30].

2017

The Ministry of Finance and the Central Bank of the Russian Federation presented the first version of the bill on the regulation of cryptocurrencies

The Ministry of Finance of Russia and the Central Bank of the Russian Federation on December 28, 2017 at a meeting of the Public Council under the Ministry of Finance presented a bill on the legal regulation of the use of digital technologies in the financial sector.

As Deputy Finance Minister Alexei Moiseev noted:

We had to avoid the temptation to regulate digital asset turnover and fund raising using digital assets the way we regulate financial markets. In my opinion, the emergence of all these digital assets is the response of the global economy to excessive in some parts or in any case very heavy regulation of financial markets.

Regulation, he said, is "very light," basic and minimally necessary.

The bill presented mainly concerns the ICO, and the rules for the turnover of cryptocurrencies will be discussed later. The final version of the bill on the regulation of cryptocurrencies, Russian President Vladimir Putin, instructed to prepare in the first half of 2018.

We have divided the concepts of cryptocurrencies and tokens, since tokens and ICOs contain the idea of ​ ​ investing. Our task as a state is to make the order of investment legally transparent and protected for investors. Further, the Ministry of Finance and I want to clarify the rights and obligations so that the company that carried out the ICO is responsible to the investors from whom it takes money, "Olga Skorobogatova, First Deputy Chairman of the Bank of Russia, told about the plans.

According to her, first of all, the authors set themselves the task of introducing, if not all, then most of the concepts so that you can somehow navigate a complex topic, operating on concepts enshrined in jurisprudence. They also devoted several lines to mining, proposing to define it as an entrepreneurial activity and, as a result, tax it, regardless of the volume of cryptocurrency mining.

However, the final decision on this and a number of other issues will be made by the Federal Tax Service.^[31]

In the Russian Federation, they can introduce criminal liability for cryptocurrency mining specifically for settlements

Deputy Finance Minister Alexei Moiseev announced the possibility of introducing criminal liability for the creation of cryptocurrencies specifically for settlements. This measure may be provided for in the upcoming law on cryptocurrencies, Interfax reported in December 2017.

The deputy minister recalled that in Russia there is currently a constitutional principle, according to which all calculations must take place in rubles. There is no punishment for violating this principle now, but the government is going to prescribe in more detail its implementation and punishment for its non-compliance, Moiseev explained.

"The penalties will be different, mainly administrative, but if someone specially organized cryptocurrency for the purpose of some calculations, there will be criminal punishment," the deputy minister said. In addition to criminal liability for issuing cryptocurrency on a large scale specifically for settlements, penalties are also provided for creating a financial pyramid or issuing cryptocurrency to replace the ruble in order to pay taxes.

Plan to legalize cryptocurrency by July 1, 2018

According to the instructions of the President, Russia Vladimir Putin approved following a meeting on digital technologies in the financial sector, held on October 10, 2017, the concepts of such phenomena as a distributed register, a digital letter of credit, a digital mortgage, a token, will be enshrined in Russian legislation. smart contract cryptocurrency In this case, the concepts will be formulated taking into account what ruble is the only legal tender in. of the Russian Federation

At the same time, requirements will be developed for the organization and implementation of cryptocurrency mining (mining), registration of business entities and the procedure for taxing the income received from mining. In addition, a system for regulating ICO (Initial Coin Offering), or "public raising of funds and cryptocurrencies by placing tokens" will be created - by analogy with the regulation of the initial placement of securities.

The Bank of Russia and the Government of the Russian Federation will be engaged in execution of instructions. The deadline for their execution is set until July 1, 2018.^[32]

The Ministry of Finance and the Central Bank will prepare a bill on the regulation of cryptocurrencies by the end of 2017

The state intends to "lead and regulate" the process of issuing and circulating cryptocurrencies - such a decision made on October 10, 2017 at a meeting with the President, the Russia Vladimir Putin To Interfax head Ministry of Finance of Russia said. Anton Siluanov^[33]

In addition to the Minister of Finance, the meeting was attended by Presidential Aide Andrei Belousov, Chairman of the Central Bank Elvira Nabiullina and Deputy Head of the Central Bank Olga Skorobogatova, General Director of QiwiSergey Solonin.

The President yesterday voiced the problems associated with cryptocurrency. These are difficulties with the regulation of "anti-money laundering" legislation, and various cases associated with the difficulties of identification. Therefore, we agreed on the following: that it is necessary for the state to regulate the process of issuing cryptocurrencies, the mining process, the circulation process, the ministry said.

According to Anton Siluanov, the Ministry of Finance and the Central Bank intend to determine the key basic positions on the regulation of cryptocurrencies by the end of 2017 and prepare a framework bill, which will subsequently be finalized and clarified.^[34]

To the question of journalists about which body will directly deal with the regulation of cryptocurrencies, Siluanov did not give a specific answer, indicating that in this area of ​ ​ responsibility there are "topics for the Central Bank, and for the Ministry of Finance, and for Rosfinmonitoring."

The State Duma ordered a study of the cryptocurrency market and ICO

As it became known on September 22, 2017, the State Duma announced an open competition for an expert and analytical study on the topic "Legislative regulation of the introduction and practical application of modern financial technologies." The cost of services under the contract is determined in the amount of 2.49 million rubles.^[35]

The winner will have to analyze the blockchain cryptocurrencies Initial Coin Offering (Initial ICO Coin Offering) as an alternative channel for attracting investments and, based on its results, form a proposal to counter risks and threats that these technologies can potentially pose at the legislative level. We are talking, in particular, about the possibility of financing terrorism and obtaining illegal income.

According to the tender documentation, the results of the expert and analytical study will serve as the basis for the preparation of a package of legislative initiatives for integration into the Russian market of promising financial technologies. As stated in the procurement documents, an analysis of the latest financial technologies is necessary so that "under the influence of strict regulation, not to destroy the spread of promising financial technologies, to avoid the appearance of bubbles on their basis that can compromise them." Among the goals of the study is also called the protection of the interests of consumers of financial services.

As of September 22, 2017, applications are being received from potential contract performers.

The head of the Central Bank Elvira Nabiullina against the legalization of cryptocurrencies

At a meeting of Russian President Vladimir Putin with businessmen in the Kremlin on September 21, 2017, one of its participants proposed legalizing cryptocurrency, but the chairman of the Central Bank (Central Bank) Elvira Nabiullina objected to this idea^[36].

"There

was a proposal to legalize cryptocurrency from one of the entrepreneurs. But Elvira Sakhipzadovna said that the Central Bank is against this, because it is actually a loss of state control over cash flows from abroad, "Alexander Kalinin, head of the all-Russian public organization of small and medium-sized enterprises Opora Rossii, told Interfax

.

"She said that the Central Bank is against following the Japanese path (in Japan in 2017, a law on cryptocurrency was adopted, it was recognized as an official settlement, the publication clarifies), to actually make the exchange. For the reasons we won't trace the channels. Who will use this channel? For what purposes?, "Kalinin quoted the head of the Central Bank

.

Kalinin did not specify who exactly raised the issue of legalizing cryptocurrencies. In total, several dozen businessmen, including from the banking sector, took part in the meeting with Putin on Thursday. The event was attended by the leaders Rosneft AFK Sistema",,,,,,,,,,,,,,,,,,,", Alfa-Bank GazprombankLukoil RUSSIAN RAILWAYYandex VEB SberbankMechel VTB NLMK"", "etc Severstal.Aeroflot USC

The Ministry of Finance proposed to ban the sale of cryptocurrency to individuals

According to the Ministry of Finance of Russia, cryptocurrency should be regulated as other property and classified as a financial asset. At the same time, the department considers it necessary to introduce a ban on the sale of bitcoins to individuals and allow only qualified investors to conduct transactions with cryptocurrency on the exchange. This was announced on August 28, 2017 by Deputy Finance Minister Alexei Moiseev in an interview with the Russia 24 TV channel. ^[37]

As he explained, this approach is designed to ensure the protection of the rights of buyers and sellers, and the Ministry of Finance is already discussing the possibility of its implementation with the Central Bank and the Moscow Exchange.

There is a point of view that cryptocurrencies such as bitcoin are a financial pyramid. It's hard to argue with this point of view. Such investments are highly risky. This determines our approach to regulating them, - explained Moiseev.

As an argument in favor of the proposed approach, the deputy minister also cited the fact of an increase in the use of cryptocurrencies for illegal operations in Western Europe and Russia.

This is due to the fact that the mechanisms for combating capital laundering are now not fully applicable to cryptocurrencies. This is the second task, why through the exchange. So that the regulator in the person of Rosfinmonitoring always knows who sells and who buys these bitcoins. Because now there are precedents when money is laundered through the purchase and sale of bitcoins. This must be ruled out, "he stressed.

The Ministry of Finance will not issue licenses to work with cryptocurrencies

The Ministry of Finance of the Russian Federation announced in April 2017 that special licenses would not be issued for operations with cryptocurrencies. Work with bitcoin will be regulated on the basis of a license for brokerage services, which also has banking institutions.

Alexey Moiseev, Deputy Minister of Finance of the Russian Federation, notes that the issue of countering money laundering and consumer protection is regional. In this regard, the department will prepare a number of proposals for the government.

It is expected that the government will legally legalize bitcoin and other cryptocurrencies so that it is possible to officially carry out operations for their purchase and sale, including in banks^[38].

The Central Bank proposed to consider bitcoins a digital commodity

In April 2017, it became known about the plans of the Russian authorities to legalize cryptocurrencies. The Central Bank and relevant departments are thinking about what status they should receive, Vedomosti writes.

According to Deputy Finance Minister Alexei Moiseev, in 2018, operations with cryptocurrency, in particular with bitcoins, may be legalized in Russia. The government is considering such an opportunity as part of the fight against illegal money transfers, he said.

At every point in time, the state should know who is on both sides of the financial chain. If there is a transaction, the people who conduct it must understand who they buy from and sell to, just like with banking operations, "Alexey Moiseev told Bloomberg.

By April 2017, cryptocurrencies were banned in Russia. In March, Prime Minister Dmitry Medvedev instructed the Ministry of Economic Development and the Ministry of Telecom and Mass Communications to analyze the possibility of using blockchain technology in the field of public administration and economic management in Russia.

As a representative of the Bank of Russia told Vedomosti, the regulator and relevant departments are developing a joint position on the status of cryptocurrencies, after which it is planned to determine approaches to their regulation.

According to the top manager of a large state bank referred to by the publication, bitcoin would be suitable for settlements between individuals or legal entities in any configuration, but at the same time it is necessary to remember the risks associated with the volatility of its exchange rate.

Oleg Legostev, Vice President of the Foreign Exchange Operations Department of Alfa-Bank, considers the most likely operations to buy cryptocurrency through a bank card in order to continue to pay it on the Internet. The use of cryptocurrencies will reduce commissions, he is sure.^[39]

In May 2017, it became known that the Bank of Russia proposes to identify cryptocurrencies as a digital commodity and introduce their taxation, said Deputy Chairman of the Central Bank Olga Skorobogatova at a speech in the State Duma.

"Since virtual money is issued that is not provided with gold reserves and is not controlled in terms of its quantity, sooner or later this can lead to instability in the financial markets," Skorobogatova said, noting that so far the amount of cryptocurrency in the market is "not tragic in general for the market" ^[40]

.

Skorobogatova clarified that the Central Bank proposes in relation to cryptocurrencies in Russia "to apply legislation with certain clarifications in terms of taxes, control and reporting, as a digital product." According to her, such a proposal was supported by the Ministry of Finance, the Ministry of Economic Development and the "power departments" with which the Central Bank held meetings. In a month, the Central Bank will complete the preparation of a version of regulatory documents, which will indicate in which documents new norms need to be entered.

2016

State Duma deputy Lugovoy: creating optimal legal conditions for the development of cryptocurrency is the task of the day

On October 14, 2016, Andrei Lugovoi, deputy of the State Duma of the Russian Federation and deputy chairman of the State Duma Committee on Security and Anti-Corruption, announced two possible forms of legislative design in the field of cryptocurrency turnover.

According to the deputy, the task of the day is to create optimal legal conditions for the development of cryptocurrency. The law, on the one hand, should not allow Russia to "fall out" of the general trend in the development of financial technologies and allow capital outflow, on the other hand, should exclude the risks of using virtual currency to legalize criminal proceeds and finance terrorism.

The State Duma is considering two possible forms of legislative design in the field of cryptocurrency turnover:

• introduction of separate amendments to the current legislation. Noticeable refinement will be required by the law on the payment system, the Tax Code, laws on the Central Bank of the Russian Federation, on licensing of certain types of activities, etc. The implementation of this concept will entail, according to the deputy, the need to strengthen attention to the establishment of zones of special control and financial monitoring.
• the development of a special law "On the Basics of Cryptocurrency Regulation," which should reflect: the legislative definition of cryptocurrency and its main features, subjects of relations, principles of regulation, measures to counter the use of cryptocurrency for criminal purposes. To do this, it is important to establish the availability of transaction information for supervisory authorities, license mining and accreditation of organizations that control processing, etc.

By developing a single legislative concept of cryptocurrency, Russia may become the first country in the world to adopt the Law on Cryptocurrency.

At the initiative of the Andrei Lugovoi in April 2016, a working group was created on the site of the State Duma to assess the risks of cryptocurrency turnover. This is a platform for intensifying the efforts of economists and lawyers to develop a cryptocurrency regulatory model.

But to implement the idea of ​ ​ preparing the relevant law, it is important to take into account the interests of leading players in the field of financial regulation and control:

• Central Bank - maintaining financial stability and control over exchange sites;
• Ministry of Finance - maintaining financial stability;
• Rosfinmonitoring - prevention of laundering of criminal proceeds and financing of terrorism;
• Banking sector - the development of blockchain technology, interbank interaction, improving the quality and speed of banking services;
• Business - community - mining and the use of cryptocurrency in the framework of transnational cooperation.

The first control zone should be identification. Users, miners, stores, exchanges, exchange offices must be identified. In 2016, Spain's finance ministry ordered cryptocurrency miners to register and pay taxes. Now their activities are legally considered economic. At the same time, cryptocurrency in Spain is considered a means of payment, its sale is not taxed. Nevertheless, miners themselves are obliged to reflect their activities in the tax return when paying income tax on individuals or legal entities.

Second zone: exchanges and exchange sites. They must have a special license issued by the Central Bank.

The third zone of control should be cashing out cryptocurrency. This operation should be subject to the recommendations of the FATF (Financial Action Task Force, FATF).

There will be no criminal punishment in Russia for the circulation of cryptocurrencies

Russian departments as a whole spoke out against the introduction of criminal liability in the country for the use of bitcoins - electronic currency. This was reported to Interfax by a source close to the financial and economic block of the government^[41].

As noted, the Ministry of Finance, the Central Bank and the government apparatus agreed with the arguments of the Prosecutor General's Office and the Ministry of Justice against the introduction of such a measure. It is expected that the report to the President of the Russian Federation on this topic will be submitted to the government in August 2016. So far, we are talking only about monitoring the use of cryptocurrencies.

Bitcoin will equate in Russia to foreign currency

This was stated by Deputy Finance Minister Alexei Moiseev in an interview with Rossiyskaya Gazeta. A. Moissev said that the Ministry of Finance is currently developing a bill that will regulate the use of cryptocurrency in Russia. According to the Constitution of the Russian Federation, the only currency in the country is the ruble, and the only issuer is the Bank of Russia, the issue of any other currencies is illegal.

"Our goal is to exclude the circulation of cryptocurrencies in Russia," the deputy head of the Ministry of Finance emphasized.

However, at the same time, he noted that the state is interested in the development and implementation of blockchain technology. A. Moiseev said that, for example, an experiment is already underway to introduce blockchain technology when storing information about securities.

"But blockchain technology works so much that bitcoins always arise when used as by-products. And it is clear that we must exclude responsibility for issuing bitcoins from data operators in such a situation so that they do not have any risks of getting punished, "the Deputy Finance Minister said.

A. Moiseev noted that it is possible to draw an analogy between the use of bitokines and foreign currency: "the use is limited, it is impossible to issue foreign money in Russia, but you can buy currency, put it in your pocket and go abroad."

Therefore, the Ministry of Finance is working to clarify specific formulations in the upcoming bill so that "operations to buy cryptocurrencies for the purpose of using them outside Russia, as well as selling bitcoins abroad for profit, are possible."

The bill can be submitted to the State Duma by the end of 2016.

Russian authorities offer to jail for bitcoins for 6 years

The amendments of the spring of 2016 to the Criminal Code provide for punishment for the release of bitcoins in the form of imprisonment for 7 years. It is proposed to establish such a period in relation to top managers of financial organizations, including banks, insurance companies and companies involved in investment management^[42].

The Ministry of Finance of the Russian Federation has prepared tougher amendments to the Criminal Code, establishing punishment for issuing money surrogates. Now for the same acts, a punishment is proposed in the form of a fine of up to 500 thousand rubles or in the amount of the convict's salary or other income for a period of up to three years, or imprisonment for up to four years. For an organized group, punishment is provided in the form of a fine in the amount of 500 thousand to 1 million rubles or in the amount of the convict's salary or other income for a period of two to four years, or imprisonment for up to six years.

Amendments to the State Duma will be made by the government, relevant departments, as well as participants in the banking market, according to the newspaper, support the innovations. Arguing the ban on virtual money, the Ministry of Finance relies on the first paragraph of Article 75 of the Constitution of Russia: "The monetary unit in the Russian Federation is the ruble. The cash issue is carried out exclusively by the Central Bank. The introduction and issue of other money is not allowed. "

Investigative Committee promised to introduce criminal liability for bitcoins

The head of the Investigative Committee, Alexander Bastrykin, in an interview with Rossiyskaya Gazeta in January 2016, Goa promised to criminalize the use of cryptocurrencies, including bitcoins^[43].

"It is

necessary to actively fight various kinds of" soap bubbles "in the financial market, that is, financial instruments that are not secured by any liquid assets. Often, it is the oversaturation of the market by such means that entails a financial crisis, which later passes to other markets, "the head of the UK said

.

According to Bastrykin, other departments are in solidarity with the opinion of the UK in this matter, so the UK proposes to "establish criminal liability for the release and circulation of money surrogates."

"The need to introduce criminal liability for the act in question is due to the widespread turnover of the so-called virtual cryptocurrencies in recent years, the most famous of which is bitcoin," Bastrykin explained.

The head of the UK notes that virtual currencies are not supported by anything, as a result of which they are traded at high volatility.

"The

bitcoin exchange rate has grown by more than 1000% over the past two years alone. Transactions in the cryptocurrency system are made anonymously, without centralized control and free of charge. The anonymity of payments motivates the use of virtual currency to commit crimes, including such as drug trafficking, weapons, terrorist financing, tax evasion, "Bastrykin criticizes cryptocurrencies

.

Earlier^[44], it was reported that Bitcoin investors predicted a 10-fold increase in Bitcoin. At the same time, the media reported that Sberbank intends^[45] to use the technology of protecting cryptocurrencies - blockchain, and the head of Sberbank German Gref earlier^[46] admitted that he was trying to invest in bitcoins.

Notes