Russia’s Ministry of Internal Affairs Main Directorate for Drugs Control (GUKON) is reported to be investigating whether criminal sanctions are appropriate for unregistered cryptocurrency operations.
Local news outlet Izvestia has published what it claims are documents acquired from the ministry that detail its pursuit of an amendment to existing legislation that would criminalize crypto operations unregistering with financial and tax state authorities.
What would criminalization mean?
Head of GUKON Andrey Khrapov pushed the Ministry of Finance on its opinions on the feasibility and appropriateness of the proposed changes, with the Ministry of Economic Development apparently skeptical that criminalizing cryptocurrencies at this stage would be productive.
Savva Shipov, deputy chief of the Ministry of Economic Development, noted that Russian law currently lacks any clear regulations on cryptocurrency transactions, only pertaining to prosecution for people who utilize digital currencies for participating in illegal operations such as terrorist funding.
This position was supported by Artem Tolkachev, a legal expert and CEO at Sputnik DLT. Speaking to Cointelegraph, he said that it does not make sense to criminalize unregistered cryptocurrency operations prior to establishing clear-cut regulations in the country. Tolkachev described cryptocurrency trading as a ”grey zone” in Russia right now and, without a stable legal framework, there is not ground yet to criminalize it.
The proposed amendments would have a negative impact on the future of innovations from crypto-related businesses, according to Tolkachev. As he sees it, criminalization would just move operations out of Russia as he says several projects already have already begun working “through foreign setups”.
Crypto regulation in the works
In January, the Ministry of Finance introduced a bill that would fully regulate blockchain and cryptocurrency titled ‘On Digital Financial Assets‘. To date, it has passed the first of three required reading by Russia’s parliament. If successfully passed, it would legalize cryptocurrency activities including ICOs, but would not recognize digital currency as a legal form of payment in Russia.
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