Russia proposes new rules and sanctions for cryptocurrency owners

The Russian Ministry of Finance has developed new amendments to the country’s cryptocurrency regulation. The proposal outlines a new set of rules for cryptocurrency owners, exchanges and miners, as well as penalties for undeclared crypto transactions.

Russia’s new Crypto regulation

Russia’s finance ministry has proposed new amendments to the country’s digital financial assets law that will take 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 details of the proposal . This is a significant increase from the September ministry proposal that required taxpayers with a total transaction of 100,000 rubles to report their transactions and holdings to the tax authority. The first deadline for reporting will be April 30, 2022.

The new proposal also requires cryptocurrency exchanges and miners to provide information about their cryptocurrency transactions to Rosfinmonitoring, the federal financial monitoring service.

Not disclosing data to tax authorities twice in three years or deliberately providing false information is a criminal offense, the publication said. For taxpayers with crypto transactions worth 45 million rubles or more in two of the last three years, the proposed penalties include a fine ranging from 500,000 rubles to 2 million rubles, forced labor of up to five years and imprisonment for a period between 18 months and three years. Penalties for undeclared crypto transactions of lesser value include a fine, forced labor and a shorter detention period.

Following the announcement, the Ministry of Finance made it clear 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 press service noted.

Russian President Vladimir Putin signed the digital financial assets law in July which will go into effect in January. Legalizes cryptocurrency but prohibits its use for payment for goods and services. According to Russian Attorney General Igor Krasnov, government officials will also have to declare whether they have cryptocurrencies. Meanwhile, the country’s central bank, the Bank of Russia, has unveiled its plans to build and test a central bank’s digital currency, the digital ruble.

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