Tuesday, November 24, 2020
Home Decrypt News Russia Proposes up to 3 Years of Jail for Undeclared Crypto Wallets

Russia Proposes up to 3 Years of Jail for Undeclared Crypto Wallets

In brief

  • Russia’s Finance Ministry has prepared new amendments to the country’s crypto law, says a report.
  • The draft bill would see to it that crypto holders declare their wallets to the tax authorities.
  • Non-compliance would lead to fines or up to three years in prison.

Russia’s Ministry of Finance (Minfin) has prepared a new draft bill on the regulation of cryptocurrencies which, if it comes into effect, would force residents to declare their crypto wallets—or face up to three years in prison, local news outlet Kommersant reported today.

According to the proposal, any individual or legal entity that received more than 100,000 rubles (roughly $1,300) worth of crypto per year should be obliged to notify the tax authorities and submit a corresponding report. In case of non-compliance, violators would face a fine of 30% of the amount received—but no less than 50,000 rubles ($650).

If over one million rubles ($13,000) in crypto should “pass-through” an undeclared crypto wallet in a year, its owner could be facing up to three years of prison time or a community sentence, proposed the document.

According to local lawyers, if these amendments are approved, they will come into force retroactively, so Russian crypto holders will also have to include their 2020 transactions in their reports.

The Ledger Nano S is a crypto hardware wallet. Image: Shutterstock.

Kommersant noted that the criminal part of the amendments is quite extensive. “The use of cryptocurrencies while committing a crime,” for example, is proposed to be recognized as an aggravating circumstance. But the bill is not even limited to the territory of Russia.

Foreign entities—such as exchanges, depositories and other organizations from a very broadly described list—are also proposed to be obliged to send quarterly reports about Russian cryptocurrency transactions to the tax authorities, proposed Minfin. However, “hardly anyone will take this seriously,” argued Roman Yankovsky, a member of the Russian Lawyers Association’s commission on digital economy legal support.

A meeting to discuss the new amendments is scheduled to take place this week as Minfin has already sent out the draft bill to several ministries, the outlet added. Judging by the previous statements, the Ministry of Economy could’ve been among the ones to call for softening the amendments—but it didn’t receive an invitation.

As Decrypt reported, after approving a somewhat “milder” version of its crypto law, Russian authorities keep coming up with increasingly stricter amendments to it. Just recently, Minfin submitted a new bill that would make it illegal for miners to receive rewards in cryptocurrencies such as Bitcoin or Ethereum. While governments can’t ban Bitcoin—they can certainly get in its way.

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