Russia: cryptocurrencies to be regulated by July

Two draft bills on the regulation of the cryptocurrency market have been developed and will be submitted to the Parliament this month

What has happened?

Russia has indicated that it will regulate the cryptocurrency market by 1 July 2018.

What does this mean?

A report by the Parliamentary Gazette, the official publication of the Russian Parliament, explains that Russian President Vladimir Putin has instructed that a regulatory framework in respect of cryptocurrencies should be ready by 1 July 2018.

Two draft bills on the regulation of the cryptocurrency market have been developed.

The first one was drafted by the Central Bank of Russia and deals with alternative ways of attracting investment, such as crowdfunding, while the second was put together by the Ministry of Finance and concerns digital financial assets.

The two documents establish the legal basis for initial coin offerings (ICOs) in Russia and regulate, among other things, the turnover of the cryptocurrency market and mining.

The two drafts concur on the main elements around the regulation of cryptocurrencies, but a key contradiction remains between the two offices on the status of cryptocurrency exchange operations, according to the Chairman of the State Duma Committee for the Financial Market Anatoly Aksakov.

"The Central Bank is against the legalisation of this type of digital currency because, in this case, citizens can start actively investing in crypto assets, without having considered the potential risks," Aksakov explained.

Under the Central Bank's draft law, only commercial organisations and individual entrepreneurs can attract investments in crowdfunding. 

This means that non-profit organisations will not be able to attract investments, according to Venera Shaydullina, a senior lecturer at the Department for Legal Regulation of Economic Activity at the Financial University.

Foreign start-ups that have not registered a branch in Russia will also be barred from taking part in the process, as the Civil Code stipulates that they are not legal entities.

Aksakov indicated that both draft bills will be presented to the State Duma, the lower house of the Russian Parliament, this month.

Next steps

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Contacts
John Salmon
Partner
London
Languages English
Topics Blockchain
Countries Russia

 

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