Russia Prepares its Final Crypto Regulation Bill (Report)

he Russian Ministry of Finance has reportedly finalized its draft law on cryptocurrency regulation and is ready to implement it soon. The legislation is particularly relevant to digital asset mining, as experts believe it will create new opportunities for participants. On the other hand, it could lead investors to the “black market”.

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It’s high time for some clarity

Russian authorities have been undecided on how to regulate the local cryptocurrency sector. In early 2022, the country’s central bank (notorious for its anti-crypto stance) proposed to implement a blanket ban on all attempted digital assets inside Russia’s borders.

The Finance Ministry and President Vladimir Putin did not support the idea. The former suggested imposing a regulatory framework on the industry is a better step, while the Russian leader argued that crypto (especially mining) could bring some benefits to his country.

Months passed and the institutions struggled to find a consensus. It is also safe to assume that the government’s attention must have primarily turned to the ongoing military conflict, leaving the issue of crypto regulation unresolved.

According to recent coverage, however, the Russian Finance Ministry has formulated the final outlook for the legislation. It introduces a wide range of requirements for identification, accounting and certification policies that must be met by crypto investors:

“According to the bill, digital currency can be accepted” as a means of payment that is not the currency unit of the Russian Federation “, as well as an investment, while there should be no person obligated to him.”

Additionally, crypto exchanges operating in the bill’s jurisdiction can be trading platforms with a capital of at least 30 million rubles ($366,000), while crypto auctions can be organizations with holdings of at least $1.2 million. Both entities will have to submit annual reports on their activity, meet internal control and audit requirements and create a separate structural unit.

Only companies based in Russia can apply for the role of Digital Asset Operators. Foreign organizations will need to obtain a license to operate in the Russian Federation and form a subsidiary.

Chen Limin, CFO of ICB Fund, believes that the world’s largest digital asset trading platform, Binance, may be given the green light to move to Russia. Interestingly, CZ’s company has already shown its intentions to expand into the country.

What about crypto mining?

It is no surprise that the primary focus of the legislation is enforcement of regulations in the digital asset mining industry since Putin finds the niche useful. Moreover, Russia is among the world leaders in cryptocurrency mining in terms of global hash rate, behind the United States and Kazakhstan.

In its latest bill, the Ministry of Finance said that minors will have to submit their application in a relevant registry, as the government will provide the necessary data centers for this purpose. Taxation will be set separately:

“Finally, for the first time, the draft law examines in detail the mining process that legal persons and individual entrepreneurs will be able to carry out after being registered in the corresponding register.”

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