New amendments to the draft law “On digital financial assets” introduced by the Ministry of Finance will not allow miners to make a profit in cryptocurrency.
Several amendments made the Ministry of Finance of the Russian Federation to the draft law “On digital financial assets” make it impossible. According to the recommendations of the Ministry of Finance, transactions with cryptocurrencies will be considered legal only in three cases: inheritance, receipt of digital assets as a result of bankruptcy, and enforcement proceedings. At the same time, cryptocurrency cannot be used as a means of payment. It is proposed to introduce administrative and criminal liability for the illegal circulation of digital assets and the execution of transactions with them. It is planned to introduce a fine of up to 100 thousand rubles and seven years in prison. For legal entities, the punishment a fine of up to 1 million rubles.
A separate clause in the amendments concerns cryptocurrency mining. Ministry officials propose to allow mining as a field of activity, but prohibit receiving rewards for mined coins in cryptocurrency, which contradicts the very essence of coin mining. According to the Finance Ministry’s proposal, digital money production operations should be devoid of financial value. Then it is not clear how exactly the miners should receive the reward if it is paid in the BTC or ETH.
If the amendments are adopted, mining in Russia will not make sense, since miners will not be able to receive the earned reward. This automatically cancels Russia’s plans to conquer the world mining market.
“At the stage of adopting the document, the legislators realized that no one understood it, and decided to concretize it, but it turned out even less clear”
Roman Yankovsky, Counsel of IP / IT Practice of the Moscow Bar Association Tomashevskaya & Partners
How to inherit bitcoins in Russia
Russian crypto experts are confident that the bill needs serious revision. Some provisions of the document are frankly meaningless. For example, the section on the inheritance of crypto assets. According to the proposals made, bitcoin can be inherited within the family, but the donation of crypto assets is prohibited.
“It turns out that for the legal transfer of bitcoin within the family, a person will only have to commit suicide”
Mikhail Uspensky, deputy chairman of the Commission for the Legal Support of the Digital Economy of the Moscow branch of the Russian Bar Association
In addition, the clause on the receipt of crypto coins in the event of bankruptcy raises individual complaints. Experts assure that the proposed bill contradicts itself. In particular, the document says that obtaining digital assets will be legal during the implementation of the bankruptcy procedure, but a bankrupt company simply cannot sell digital coins, since this is prohibited by the bill.
“If transactions with virtual currencies are prohibited in Russia, as required by the draft law, it will be impossible to sell bitcoins and ethers as a defaulter’s debt”
Denis Novak, Deputy Justice Minister
Experts reported earlier about the lack of logic in the bill. For instance, Tatyana Maksimenko, PR director of the Garantex cryptocurrency exchange, said that the law “On digital financial assets” was created to bypass it. According to it, cryptocurrency exists outside of the jurisdiction. Nothing prevents the user from purchasing cryptocurrency on an exchange registered in a foreign jurisdiction and even paying with it for goods and services provided by a company also registered outside Russia. In fact, these commodity-money relations are outside the perimeter of regulation of the Russian authorities, therefore, the ban on the use of cryptocurrency as a means of payment is hardly realizable in practice. It is easy to get around it as if it doesn’t exist.