The Russian Ministry of Finance has developed new amendments to the country’s cryptocurrency regulation. The proposal outlines a new set of rules for crypto owners, exchanges, and miners, as well as penalties for undeclared crypto transactions.
Russia’s New Crypto Regulation
Russia’s Ministry of Finance has proposed new amendments to the country’s law on digital financial assets that will go into effect in January, Russian business newspaper RBC reported Thursday.
Cryptocurrency owners, both individuals and organizations, will be required to report their crypto transactions and wallet balances to the tax authority if the total transaction amount exceeds 600,000 rubles ($7,757) in a calendar year, the proposal details. This is a significant increase from the ministry’s proposal in September that required taxpayers with a total transaction of 100,000 rubles to report their transactions and holdings to the tax authority. The first reporting deadline will be April 30, 2022.
The new proposal also requires cryptocurrency exchanges and miners to provide information on their cryptocurrency transactions to Rosfinmonitoring, the Federal Financial Monitoring Service.
Failing to disclose data to the tax authorities twice in three years or deliberately providing false information is a criminal offense, the publication conveyed. For taxpayers with crypto transactions worth 45 million rubles or more in two of the past three years, the proposed punishments include a fine ranging from 500,000 rubles to 2 million rubles, forced labor of up to five years, and imprisonment for a period of between 18 months and three years. Punishments for unreported crypto transactions of smaller value include a fine, forced labor, and a shorter period of detention.
Following the announcement, the finance ministry clarified that the regulation is necessary to prevent the illegal use of cryptocurrencies. “The use of digital currencies is increasing every year. Often this happens not only for investment purposes but also for money laundering,” the ministry’s press service noted.
Russian President Vladimir Putin signed the bill on digital financial assets into law in July which will go into effect in January. It legalizes cryptocurrency but prohibits its use for payments of goods and services. Government officials will also be required to declare if they have any cryptocurrencies, according to Russian Prosecutor General Igor Krasnov. Meanwhile, the country’s central bank, the Bank of Russia, has unveiled its plans to build and test a central bank digital currency, the digital ruble.
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