The Russian government has asked public officials who own or trade cryptocurrencies to disclose their holdings, according to new guidance signed by President Vladimir Putin on Friday.
Per the notice, cryptocurrency is an investment asset, and, like other property held for investment, it may create a conflict of interest for employees who own it. The new rules will take effect next month and the first reporting deadline will be June 30, 2021.
The document does not establish any specific thresholds to trigger reporting obligations. But, according to draft proposals, Russians will be required to report their crypto holdings to the tax authority if the total transaction amount exceeds RUB 600,000 ( roughly $8,200) in a calendar year.
Failing to disclose data or deliberately providing false information is a criminal offence. Penalties for unreported crypto transactions include a jail term of up to three years and a fine ranging from 500,000 rubles to 2 million rubles, the finance ministry proposed.
The recent moves come barely a few months after Russia’s bill to regulate cryptocurrencies had been signed by President Vladimir Putin. The new law provides the regulatory framework of digital financial asset (DFA) transactions and gives legal status to cryptocurrency, though it prohibits its use as a means of payment.
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Notably, the Russian finance ministry suggested that August’s laws may not be the final word on the subject. Instead of bills submitted to the Russian parliament recently, which, if signed into law, will punish crypto dealers with prison terms and hefty fines, the ministry wants to establish mechanisms for ‘the controlled circulation of virtual money’. The authority believes that the adoption of the current bill version will only create an ‘uncontrolled black market’.
Last month, officials said they developed new amendments to the country’s cryptocurrency regulation, which outlines a new set of rules for crypto holders, exchanges and miners.
In contrast, recent draft bills submitted by a group of deputies seek to penalize individuals with seven years in prison and fines of up to $7,000 for using cryptocurrencies in financial transactions. In addition, crypto firms could face nearly $30,000 in regulatory fines if they get involved in crypto business without approval from the Russian central bank.
In an effort to foster regulatory clarity in the Russian cryptos pace, the nation’s central bank has recently proposed fresh guidelines to govern market participants and floated the idea of a digital rouble in October.