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Russia to Provide ‘Civilized Direction’ for Preventing Crypto Scams

The Prime Minister of Russia, Mikhail Mushustin, made a statement on November 26th, 2020, during a government meeting. The Prime Minister stated that the country’s government is making plans of taking the crypto space in Russia in a ‘civilized direction’ in an attempt to protect the participants of the space from crypto scams. He proposed the development of a legal framework that could be introduced for allowing crypto asset holders to ensure that their rights and interests are fully protected. Mushustin acknowledges that there was increased interest in these digital assets, but also stressed that it was equally important to prevent and eliminate the operation of ‘shadow schemes’ from the crypto space. 

According to the Prime Minister, this grand plan would include making amendments to the Russian Tax Code. By doing so, they will be able to classify cryptocurrency as a property legally. In turn, this would provide users with the opportunity of seeking out legal protection in case they become victims of any illegal action. In addition, it would further enable crypto users to defend the rights of their property in the court of Russian law. Mikhail Mushustin had been declared the Prime Minister of Russia back in January of the year. 

Before taking up his new position, he had served for a decade at the Russian Federal Tax Service. After his appointment, Mushustin said that a national digital economy program should become Russia’s priority and they should focus on its development. Even so, the country’s regulatory climate for cryptocurrencies has remained mostly hazy up till now. However, the President of the country, Vladimir Putin did sign a crypto bill into slow. According to this bill, cryptocurrencies are classified as property, which could also govern the issuance of digital securities in the future. Nonetheless, there were reports flying about in September about the Ministry of Finance’s plans of introducing a new law in Russia.

The reports dictated that the law would make it mandatory for all crypto holders to report the income generated from their digital assets to the authorities for the purpose of taxation. If anyone decides not to follow through under the planned law, they could face heavy fines, hard labor, or even a prison sentence stretching for three years. There have also been talks floating around, which have hinted at the prospect of a crypto ban being imposed in the country by next year, under which people will not be able to use these digital assets for making payments. 

If this does happen, it would result in a lot more uncertainty for crypto investors in the country. It appears that Russia is unable to make up its mind about whether it wants cryptocurrencies or doesn’t want them, or is just interested in the money they are able to generate. In the meantime, the country is also working on introducing a central bank digital currency (CBDC), which would the digital Ruble, similar to other countries like China, Japan and more that are also working on their respective CBDCs.

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