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Russia: Draft Crypto Laws Take New Twist

Tim Alper
Last updated: | 1 min read

The head of Russia’s parliamentary committee for financial matters has confirmed that the country’s long-awaited crypto laws will not make use of terms such as “cryptocurrency” and “digital token” – so as not to grant them legal weight.

Source: iStock/SensorSpot

However, Anatoly Aksakov, the committee chief, stated – per state news agency Tass – that the term “[cryptocurrency] mining” would indeed be defined in the bills. Aksakov said, “People are earning money from mining, so they will need to pay taxes on those earnings. And in order to tax them, we will need to define the type of business they are doing – hence we decided to define mining in the legislation.”

Critics hit out at the government’s plan, with Oleg Sabitov of media outlet 2Bitcoins stating:

“With this sort approach, Russian traders are unlikely to ever work in a market free from constant inspections. [The new bills have] no concept of ‘cryptocurrency,’ the legislation confuses mining with initial coin offerings (ICOs). Let’s hope Russian politicians will think twice before they adopting [these] law[s].”

The bills are set to receive a second hearing in the Russian parliament sometime this month – though no firm date has yet been set.

Meanwhile, Tass also reports that Russia’s Federal Financial Monitoring Service (known as Rosfinmonitoring) has issued a report claiming that drug traffickers all over the country are using cryptocurrencies to finance their deals.

Earlier this year, media outlets uncovered the government agency’s plan to track the cryptocurrency transactions of possible terrorists, drug traffickers and money launderers using sophisticated software solutions.

Per the report, Rosfinmonitoring has uncovered evidence that cryptocurrency was used in drug trafficking schemes in at least 23 Russian territories in 2017, with drug dealers and illegal drug lab staff receiving their pay in digital tokens.

Weekly LocalBitcoins, a peer-to-peer bitcoin marketplace, volume (in bitcoin) in Russia: