Russia’s Ministry of Finance is set to discuss potential changes to an upcoming bill on cryptocurrency that could impose harsh criminal punishments, including jail time, for individuals that fail to disclose their cryptocurrency holdings and transactions.
According to a report from Russian publication Kommersant, the Finance Ministry is due to meet this week to discuss proposed amendments to the upcoming “On Digital Financial assets, Digital Currency’ bill that is expected to be signed into law in January 2021.
In preparation for the meeting, the Finance Ministry sent out a new version of the bill to various government departments that will be involved in the sitting. Sources from two different departments have shared details of the document with the Russian publication.
Of particular concern seems to be amendments to the criminal code, criminal procedure code, administrative code, tax code and laws concerning anti-money laundering.
Big Brother hones in on Crypto
At the beginning of September the Finance Ministry grabbed headlines after it was revealed that the department was considering making cryptocurrency transactions illegal.
As The Daily Chain reported, the proposed law amendments were focused on banning any transactions using cryptocurrency, with the mining industry a focal point as they would effectively be banned for being remunerated for mining.
That proposal seemingly pales in comparison to the latest proposed amendments that are due to be discussed this week. According to Kommersant, any person or company that has received cryptocurrency or digital assets worth more than 100 000 Rubles in a calendar year must submit an annual report to Russian tax authorities.
Failure to file or declare cryptocurrency holdings or transactions will result in a fine amounting to 30 percent of cryptocurrency holdings, no less than 50 000 Rubles. This was according to Dmitry Kirillov, a senior lawyer at Bryan Cave Leighton Paisner LLP.
It is also understood that foreign organisations involved in the cryptocurrency space, from exchanges to wallet service providers, will have to send quarterly reports to Russian tax authorities on any Russian nationals’ cryptocurrency holdings or transactions.
There could be serious consequences for individuals and businesses not declaring their cryptocurrency wallets. Jail sentences of up to three years are being touted for failure to declare cryptocurrency transactions or holdings that amount to more than 1 million Rubles. The proposed amendments also list forced labour as a form of restitution.
It must be noted that these criminal punishments are just proposed amendments to the upcoming bill and the Ministry of Finance has emphasized that no final decisions have been made on the overall regulation of cryptocurrency in Russia.