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Russian Ministry of Finance Amends Initial Crypto Laws

2 mins
4 September 2020, 13:31 GMT+0000
Updated by Ryan Smith
4 September 2020, 13:34 GMT+0000
In Brief
  • Russian officials allow cryptocurrency mining, but ban mining rewards.
  • This excludes assets acquired through inheritance, bankruptcy and enforcement proceedings.
  • Crypto experts view the bill as “illogical.”
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Russian authorities have proposed a set of amendments to the nation’s first crypto laws, most notably barring miners from receiving rewards.
Representatives from the Russian Ministry of Finance made several amendments on Fri 4 Sep. on the Digital Financial Assets Law that bans various crypto operations. The revision said that it’s legal to engage in cryptocurrency mining, but “not possible to receive remuneration” in the process. The amendments introduced an “outright ban on all operations with virtual currency” except in three cases. The ministry has considered all crypto transactions as illegal except receipt of digital assets through inheritance, bankruptcy, and enforcement proceedings. Additionally, crypto cannot be used for payment, failing which,
Citizens can receive up to 100 thousand rubles in fines and up to seven years in prison.
For legal entities, a fine of up to 1 million rubles is implemented, local news agency Izvestia reported.

Russia Cryptocurrency

Crypto Mining Allowed, but No Rewards

The amendment also prohibited miners from receiving payments from crypto mining. This is because, though mining is allowed, authorities usually don’t see the financial value, as payment is usually in bitcoin and ether. Dmitry Zakharov, General Director of the Moscow Digital School said that the news is confusing to miners since it doesn’t specify how they will be remunerated,
Perhaps experts will try to come up with some interesting legal structures, but all of them will involve significant risks of administrative and criminal liability
Also, experts weren’t clear on the proposed document as it didn’t address any alternative legal norms in receiving mining payments. An expert stated that mining with no reward is “unprofitable for our country” and might lead to “tax losses.” Tatiana Maksimenko, PR director of the Garantex crypto exchange, revealed in a previous interview to BeInCrypto that the law still remains “illogical” as it legalized all transactions with cryptocurrencies on the territory, but prohibited the use of digital currencies as a means of payment,
The passed bill is not that bad. It is illogical: cryptocurrency exists outside of the jurisdiction. Nothing prevents the user from purchasing cryptocurrency on an exchange registered in a foreign jurisdiction, and even paying with it for goods and services provided by a company also registered outside Russia


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