The Russian government is moving to criminalize Bitcoin transactions by proposing new legislation controlling the digital currencies.
Reported by local crypto publication Forklog, the Ministry of Economic Development has moved several bills in the State Duma, including an updated draft for digital financial assets.
The proposed laws primarily touch the administrative and criminal liability for violation of rules involved in the crypto transactions.
Though the categorization of digital currencies in Russia is not exactly clear, many institutions see them as property.
The latest proposal also clarified them as property and proposed prohibition on their issuance and circulation within the Russian territory.
If enforced as laws, this will prohibit any individual or organization to carry out any operations in digital currencies. This will include payments in cryptocurrencies for goods or services, or exchange of digital currencies.
Heavy fines and prison sentences
The amendments also proposed 50,000 rubles (around $706) to 500,000 rubles ($7,060) fine to any individual and a penalty of up to 2 million rubles ($28,240) to legal entities for organizing illegal circulation in digital currencies or involvement in the issuance of digital assets.
For violating the payments norms, the individuals will be penalized with 20,000 rubles (almost $282) to 200,000 ($2,820) rubles and for legal entities this fine is from 100,000 ($1,412) rubles to 1 million rubles ($14,120).
In addition to the large fines, the authorities can also put the involved parties under imprisonment for up to 7 years, depending on the amount of involved digital currencies and the damage to the country’s financial system.
In all the cases the involved cryptocurrencies will be confiscated by the authorities.
The only way Russian citizens or entities can hold cryptocurrencies is by declaring it to the authorities.
This came when major cryptocurrency exchanges including Binance are entering the Russian market, calling a progressive stance of the country’s leaders towards crypto.