Russian Blockchain and Cryptocurrency News Round-Up

With notes from Evgeny Korolev

Here are some of the top stories from the blockchain and cryptocurrency space in Russia over the past week. 

New ICO Legislation Stresses Liquidity, Formal Registration

The Russian Ministry of Communications has introduced a bill that will regulate ICO registration and project development.

The ICO and digital token legislation specifically looks to provide protections and liquidity for investors. According to the bill, ICOs must register with the Russian government and provide proof of at least a 100 million ruble operating budget, while the Ministry of Communications and Mass Media is charged with overseeing a five-year accreditation period for each project.

Among a laundry list of other requirements, the bill states that it is “the duty of the person issuing the digital tokens, [sic] to redeem the digital tokens at the nominal price (the price of placing the digital token) from any bearer of the digital token on the basis of an irrevocable public offer.”

This mandate is meant to pressure ICO teams into spending proceeds on project developments, but opponents aren’t convinced that it will sway them to this effect. Arseniy Schelcin, director of the Russian Association of Cryptocurrencies and Blockchain, finds that “the document contains vague wording that can cause conflicts” as it “is not synchronized with existing bills.”

“It is difficult to comment on this decision in any of its variations, because it is divorced from reality,” he told Russian news outlet, Kommersant.

Russia’s First Ruble-to-Bitcoin Exchange Opens in Moscow

Not to be confused with Sberbank, a popular Russian bank, Sberkoin opened up its office in Moscow last week. The exchange is the first of its kind in Russia, allowing its customers to purchase bitcoin directly with the Russian ruble. At this time, the exchange only offers fiat pairs with bitcoin.

The exchange claims to be operating within legal limits, though with unresolved cryptocurrency legislation wading through Russia’s legislature, its legal status is somewhat in a state of limbo. Still, current laws do not prohibit the sale of bitcoin in Russian territories, so Vladimir Yurasov, a partner at a Moscow law firm, argues that there’s no reason for concern.

“In any democratic society, including Russia, if something is not prohibited, it must be legal. In the federal legislation there are no provisions prohibiting the use of bitcoin in financial transactions. The purchase and sale of bitcoins does not violate the Civil Code.”

Russian Central Bank Looks to Complete Integration of Masterchain DL

The Russian Central Bank is considering using Masterchain, an Ethereum-derived protocol, to send financial messages through SWIFT within the Eurasian Economic Union.

Under the supervision of Russia’s Central Bank, the Russian Fintech Organization has been developing the Masterchain distributed ledger since 2016, testing its first operational version in 2017.

Olga Skorobogatova, Deputy Chairman of the Russian Central Bank, believes that the government will “discuss the options for using this project already this year.” Originally developed for Russia, the bank hopes to deploy the system throughout the European Economic Area.

Miners Tagged With Taxes

The Russian Government is amending tax code to accommodate miners.

Circulating through Russia’s lower legislative house, the bill labels mining as an “entrepreneurial activity.” As such, miners will have to register with the government, either as an individual entrepreneur or as a legal entity. Depending on how they register, miners could be subject to a 24 percent corporate tax rate if they register as a legal entity.

In addition to these amendments, Russian legislators are considering a tax of roughly 13 percent on all cryptocurrency investing or trading profit.