Russian Finance Ministry Gets Tough on Cryptocurrencies

According to an official press release published on the website of the Ministry of Finance of the Russian Federation, citizens have to report ownership of Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term to the tax authorities.

According to the proposed amendments, if the citizens fail to declare digital assets transactions worth $586,000 or more, they can face imprisonment of up to three years. Russian citizens have to report these transactions to the tax authorities at least twice every three years.

Russian Media Group, RBC reported today that the experts in Russia termed this as excessive punishment. The Ministry stated that in order to meet the requirements of the Financial Action Task Force (FATF), changes to the current bill will become mandatory.

The Ministry mentioned that the first time to report the ownership of crypto assets should not be later than 30 April 2022. Cryptocurrency exchanges and miners are required to send information about their business and transactions to the Federal Financial Monitoring Service of the Russian Federation. But, the authority also outlined current judicial protection for digital currency holders.

“There is judicial protection for digital currency holders if the owner informs both the fact of the currency's possession and transactions with it. The relevant protection procedure is provided in the Tax Code. At the same time, in the case of transactions with digital currency over a certain amount, the declaration becomes mandatory,” the Ministry said.

The Act

Russia passed the Digital Financial Assets and Digital Currency Act earlier this year, but the citizens remained sceptical about the crypto policy of the Government. According to the Ministry, new amendments are likely to regulate digital assets in line with the FATF recommendations. “Compliance with these recommendations will reduce the number of transactions related to Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term obtained by criminal means,” the Finance Ministry said.

Finance Magnates reported earlier this year about the Central Bank of Russia’s consideration to limit digital currency purchases by unqualified investors in the country.