crypt currency in RF under threat

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Holders of crypt currency wallets and accounts on bitcoin exchanges could potentially fall under the control of the Federal Tax Service of the Russian Federation (FTS) due to proposed amendments to the law “On currency regulation and currency control”.

On November 3, introduced a bill in the State Duma of the Russian Federation. This obliges citizens to report to the Federal Tax Service on the use of foreign electronic wallets; if the annual volume of transactions on them exceeds 600 000 rubles.

In an explanatory note, the authors of the document say that the norm is aime at minimizing the risks in the areas of information security, anti-money laundering, and combating the financing of terrorism.

The current version of the draft law extends regulation to “electronic means of payment”and “foreign payment service providers” and does not explicitly mention digital assets.

Dmitry Kirillov, senior lawyer of the Russian tax practice of Bryan Cave Leighton Paisner LLP and professor at Moscow Digital School, suggests that the vague wording will make it possible to extend the amendments to crypt currency wallets and investment accounts on cryptographic exchanges in the future.

Decentralized cryptocurrencies, such as Bitcoin or Ethereum, are likely not to be affected by the bill

“Formally, Bitcoin and Ethereum are not considering here. They are not tie to either the states or the supplying companies. In theory, centralized cryptographic projects, such as USDT and XRP, produced by corporations may suffer”. Says co-founder of Exante Anatoly Knyazev.

crypt currency in RF under threat

The expert noted that if desired, the bill will be sent against all cryptographic currencies, if declared “suppliers” of their developers.

Foreign electronic wallets and digital currencies are now in the process of splicing:

“Given the position of the Russian authorities with regard to cryptocurrencies, lawmakers are trying to cover the movements of cryptocurrencies and users of cryptocurrency wallets as much as possible” – Said Sergei Troshin, head of the Six Nines data center.

In his opinion, there will be special software to monitor the activity of foreign purse owners. Fines can also work in automatic mode.

However, given the complexity and cost of launching such a system, there is a chance that the idea will not be able to be implemented in practice.

This is not the first attempt of the state to establish control over the circulation of digital cash

A similar norm is contained in the amendments of the RF Ministry of Finance to the law “On digital financial assets”, which will come into force on January 1, 2021.

They oblige Russians to notify the tax authorities of the use of any electronic means of digital currency transfer, including domestic developments. The proposal of the Ministry of Finance is still under discussion.

Now the violation of currency legislation in terms of failure to submit reports on transactions on accounts with foreign banks provides for fines of up to 10,000 rubles for individuals and up to 600,000 rubles for organizations. Liability for owners of foreign electronic wallets will be additionally prescribe in the Administrative Offences Code.

“Fines for individuals are not catastrophic, but unpleasant, so cryptoinvestors should consider submitting reports to the tax authorities in advance,” – said Dmitry Kirillov.

Experts express the hope about receiving the document before the start of consideration

Remind – since August 3, users of Yandex. Money, Qiwi-Wallet, WebMoney, PayPal, VK Pay, and other services are prohibited to deposit cash anonymously through payment terminals and offices of telecom operator. To replenish the card it should be identified and tied to the bank account to the wallet.

In March 2019, the State Duma of the Russian Federation adopted amendments to the law “On the national payment system” prohibiting cash withdrawals from anonymous bank cards and electronic wallets, including crypt currency ones.

Since 2017, the country banned cross-border transfers on behalf of individuals without opening a bank account.

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