Interesting Amendments to Russia’s Crypto Bill

Written by C, Fiona

Last updated: 2022-04-29

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Crypto exchanges and wallets will be demanded to provide customer information if requested by the judiciary — and non-regulated platforms will be banned from placing ads.

New amendments have reportedly been made to a crypto bill that will make the regulation of Russia’s digital assets law.

A couple of interesting changes have been made. For instance, crypto exchanges and wallets will be required to provide customer data if requested by a judicial body.

The advertising of unregulated crypto exchanges is also going to be prohibited, and this came at the request of the FSB, part of the state’s security apparatus.

Other proposals include compelling crypto exchanges and crypto wallets to provide information to law enforcement agencies — but a report by the Russian news outlet Izvestiya does not clarify whether this will be included in the legislation.

The FSB requested information about “identification features of cryptocurrencies,” presumably referring to the founders of coins or tokens. But this would be virtually impossible because of the industry’s decentralized nature.

At a high level, the bill was accepted by the Ministry of Finance after careful review by several official bodies — including financial regulators, the taxman and the secret service.

It will now be passed on to Russia’s parliament, the State Duma, which is expected to follow the ministry’s recommendation and pass the bill.

Internal Divisions over the Scope of Crypto Regulation

The federal tax service proposed to tighten the regulation of cryptocurrency exchanges and crypto wallets without a license, although that comes against the explicit recommendation of the Ministry of Finance.

The agencies also disagree on how mining should be defined and how proceeds from crypto mining should be dealt with.

For example, the FSB advocated for a mandatory transfer of digital currencies obtained through mining to cryptocurrency exchanges, as well as for applying AML standards to them. The Ministry of Finance is against such tight regulation.

It also rejected the FSB’s suggestion of additional regulation of mining pools and cryptocurrency wallets, as it was inappropriate and “too detailed” at this point.