Proposed Crypto Regulatory Framework Submitted; Deadline Set By Russian President Putin Achieved…Just
Staff at the Russian Ministry of Finance and Central Bank can breathe easy, as a December deadline ordered by President Vladimir Putin himself has been adhered to just days before the month’s end. Indeed, the drafted laws – set to regulate all things related to cryptocurrencies like Bitcoin – have finally been submitted to the State Duma; the lower house of the Russian Parliament.
The past few days have seen details of the much-anticipated bill made public by senior staff of the finance ministry and central bank, who collaborated together to prepare the drafted law which Putin has ordered to be ratified no later than July of next year.
Over the Christmas break, Finance Minister Anton Siluanov appeared in a television interview with state-owned news channel, Rossiva 24, confirming that:
The Ministry of Finance has prepared a draft law, currently under consideration, which will determine the procedure for issuing, taxing, buying and circulation of cryptocurrency.”
Back in October, Putin officially issued orders to develop regulations for cryptocurrencies, initial coin offerings (ICO), and cryptocurrency mining. The legislative process for the bill has been fast-tracked by authorities and is expected to be officially adopted by the end of March next year – well before Putin’s July deadline – according to Anatoly Aksakov, Chairman of the State Duma Financial Markets Committee.
Perhaps the most noteworthy details shared to date relate to the proposed restrictions on ICO investment. As explained by Deputy Finance Minister, Alexei Moiseev, “a maximum of 1 billion rubles [~$US17.3m] can be raised through an ICO, and each unqualified investor will be able to invest a maximum of 50,000 rubles [~$864].” An investor who is deemed as ‘qualified’, is able to invest any amount, Moiseev added.
Criticism of this restriction have come from those arguing that such a small cap imposed on ‘unqualified’ investors is suspicious, for those with the discretion to categorise investors as ‘unqualified’ could potentially abuse such power; essentially controlling who can – and cannot – invest into what could turn out to be a financially lucrative ICO. This criticism is borne from Russia’s longstanding notoriety for restricting the common civilian so as to allow the wealthy class to capitalise on financial opportunities as they arise. Russia’s income inequality is among the worst of the OECD nations.
With the bill now submitted for consideration, news is expected to flow through within the coming days revealing how the proposed laws stood up under scrutiny.