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Russia has created a platform for public discussion of the regulation of cryptocurrencies and digital assets

Russia has created a platform for public discussion of the regulation of cryptocurrencies and digital assets

The Commission on Blockchain Technologies and Digital Economy under the public organization “Investment Russia”, the Law firm Digital Rights Center and” RosKomSvoboda ” are launching a public campaign to prevent the adoption of laws that prevent the circulation of cryptocurrencies and digital assets in Russia.

The collection of initiatives for the balanced regulation of the turnover of cryptocurrencies and digital assets will be held on the platform zakon.crypto.ru.

The initiative’s website contains a petition addressed to the Ministry of Finance of the Russian Federation, the Ministry of Economic Development of the Russian Federation, the Central Bank of the Russian Federation, the Federal Tax Service of the Russian Federation and the Financial Market Committee of the State Duma of the Russian Federation. The authors of the petition ask the state authorities to prevent the adoption of bills that will have an extremely negative impact on the crypto industry in Russia, as well as to amend Federal Law 259-FZ “On Digital Financial Assets and Digital Currencies” in order to bring it in line with the established practices and interests of the crypto industry. The petition can be additionally signed on the portal Change.org.

On January 1, 2021, Federal Law No. 259-FZ “On Digital Financial Assets, Digital Currency and on Amendments to Certain Legislative Acts of the Russian Federation”came into force. The law regulates relations related to the issue, accounting and circulation of digital financial assets and establishes a number of important definitions: “digital financial assets” (CFA),” digital currencies”,” operator of the information system in which the issue of digital financial assets is carried out “and”operator of the exchange of digital financial assets”.

Four draft laws that supplement the law and introduce additional regulation are currently under consideration in the State Duma and / or are undergoing the regulatory impact assessment (RIA) procedure in the Ministry of Economic Development. The draft laws propose amendments to the Tax Code, the Law “On Countering the Legalization (Laundering) of Proceeds from Crime and the Financing of Terrorism”, the Administrative, Criminal and Criminal Procedure Codes of the Russian Federation.

Sargis Darbinyan, co-founder of RosKomSvobody”:

“For several years, we have been promised that a crypto market will be created in Russia for investors and projects working in the field of distributed technologies. However, the approach that has been developed by the state recently clearly does not suit either the domestic professional crypto community, nor the global crypto business, nor “ordinary” users of cryptocurrencies. After many years of discussions about the legal nature of cryptocurrencies, the legislator still defined in the” CFA law ” that cryptocurrency (or, in the language of the legislator, digital currency) is property. At the same time, an extremely controversial model of legal protection was chosen for the property, which guarantees judicial protection to owners of digital currencies only under the condition of their declaration, which directly violates the right to judicial protection guaranteed by Article 46 of the Constitution of the Russian Federation. The law in its current version creates only obligations for market participants, but does not establish any rights or benefits for them. At the same time, the draft laws, the adoption of which is not far off, provide for completely inadequate measures of administrative and criminal liability for users of digital currencies. The crypto market is already feeling a clear bias, and if the bills are adopted in the form in which they were presented to us, it will further slow down this innovative industry.»

The platform lists eight main shortcomings of the current approach of lawmakers to regulating the crypto industry in Russia. Experts and authors of the petition believe that:

The existing and proposed legislative regulation is not sufficiently developed from a legal point of view and creates legal uncertainty. It does not take into account the current world practice and experience of regulating the crypto industry in other jurisdictions;

Judicial protection is available to owners of digital currencies only after declaration, which is a violation of the constitutional right to judicial protection;

Digital currencies can not be used as payment for goods, work and services, which is contrary to the nature and purpose of cryptocurrencies as a means of payment;

The amendments under consideration to the Administrative Code of the Russian Federation provide for the introduction of unreasonably large fines for violations related to the turnover of digital financial assets and digital currencies;

The amendments under consideration in the Criminal Code of the Russian Federation provide for a penalty of imprisonment for up to 3 years only for failure to submit reports to the tax authorities of the Russian Federation;

The threshold for mandatory declaration of transactions with digital currencies and reporting is unreasonably low;

The complete absence of any benefits, including tax benefits, for the crypto business.

Mikhail Tretyak, Partner, Digital Rights Center Law Firm:

“We do not propose to criticize the legislator – we propose to establish a constructive dialogue with the state in order to jointly develop a regulation that will suit all links in the chain “state – citizens – business”. The initiative is thus aimed at achieving a balance of all parties, without “distortions” in one direction or another, and easing regulation for the sustainable development of the crypto industry in Russia. We believe that this initiative will meet the understanding of the authorities, and together we can change the regulation for the better.

Also, we do not plan to focus only on changes in legislative regulation. We offer the state to work together to improve the financial literacy of citizens when working with digital assets and digital currencies. It seems that together we will be able to launch a series of educational programs for all interested parties. This will not only prevent noticeably more frequent cases of fraud, but also allow citizens to make informed decisions about the use of digital currencies.»

Nikolay Gadzhiev, Chairman of the Commission on Blockchain and Digital Economy of the All-Russian public organization “Investment Russia”:”The creation of a public initiative is an important step in creating a dialogue between the state on the one hand and the Russian blockchain community, Russian and international companies on the other. The existence of a dialogue is extremely important for the formation of a stable financial and right field in Russia, which will create conditions for the most effective development of the blockchain sector in the digital economy in Russia. Our country has unlimited opportunities and unique specialists, and with the existence of a bilateral dialogue with the state, this will allow Russia to become the dominant leader in the field of blockchain for many decades, opening up new horizons for the Russian economy.”