“Сryptocurrencies are to be included in the criminal code in Russia. What should a trader expect»
Kachkin & Partners intellectual property and information technology attorney Andrey Alekseychuk explained whether the mention of cryptocurrencies in the Criminal Code would lead to its ban.
The Prosecutor General’s Office of Russia has prepared a bill that suggests adding the cryptocurrencies concept to the Criminal Code (CC). The department is concerned that cryptocurrencies are used to commit crimes:
“The status of online platforms providing the ability to buy and sell cryptocurrency anonymously is still not defined. The issue of classifying virtual assets as property for the purposes of criminal proceedings has not been resolved «- Igor Krasnov, Prosecutor General of Russia.
Today cryptocurrencies are regulated by the Law on Financial Digital Assets in Russia. They are considered as property according to him. Tax (personal income tax) must be paid on profits from digital assets. It is prohibited to pay for goods and services with cryptocurrency.
In an interview with Currency.com, Kachkin & Partners intellectual property and information technology attorney Andrey Alekseychuk said that introducing the concept of cryptocurrencies into the Criminal Code would be useful for investigating crimes in the economic sphere.
“Based on the current wording of the code, it is not at all obvious that cryptocurrencies can be the subject of crimes such as theft, fraud or, for example, extortion. Accordingly, it is more difficult for investigators and lawyers to work on such crimes if the subject matter is cryptocurrencies»- Andrey Alekseychuk, Kachkin and Partners attorney.
The expert suggests that the definition of cryptocurrencies may appear «in the form of a note to one of the articles of the Criminal Code special part (for example, in Article 158 of the CC of the Russian Federation -«Theft») and will apply to all economic crimes.»
Alekseychuk added that the concept introduction is unlikely to lead to some kind of cryptocurrencies or mining bans in Russia in general:
“If the state was confident in this decision, it would have introduced such bans along with the adoption of the Law “On Digital Financial Assets” and Digital Currency — the corresponding amendments were provided for in the bill, but they were excluded when the bill was considered in the second reading. Of course, it cannot be ruled out that such bans will appear in the future, for example, as in China. But I would not associate the likelihood of these bans with the introduction of the concept of cryptocurrencies into the Criminal Code» — Andrey Alekseychuk, Kachkin and Partners attorney.
It should be noted that there are several parallel discussions about cryptocurrencies and related processes in Russia now. Therefore, the Central Bank and credit organizations are developing a mechanism that can block payments to crypto-exchanges and exchangers.
Moreover, the regulator said they are working to ensure that there is «some kind of responsibility» for cryptocurrencies operations. Probably administrative or criminal. Later, the Central Bank released a detailed financial market development project, including digital assets.
In parallel with the Central Bank and the Prosecutor General’s Office, Rosfinmonitoring is discussing the regulation of crypto exchangers. The final decision is planned to come in 2022. Deputy Director of Rosfinmonitoring Herman Neglyad added that as for this issue the department relies on the recommendations of the FATF (Group of Financial Measures to Combat Money Laundering Development).
Two options for resolving this issue are currently being considered. The first is to classify crypto exchangers as subjects of anti-money laundering legislation, and the second is to completely ban their activities in Russia. Previously, the regulator called operations with such exchangers «dubious».
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