Russia Presents Draft Bill on ICOs and Cryptocurrency26.01.2018

The Russian Ministry of Finance in the long-awaited draft law on the regulation of initial coin offerings (ICO) described the procedure for placing tokens by analogy with the primary sale of securities (IPO), and prohibited unqualified investors to purchase tokens worth more than 50,000 rubles within one release, the bill says.

The government plans to control the issuance and circulation of the cryptocurrency. Russian President Vladimir Putin required officials to prepare the final version of the draft law on the regulation of cryptocurrency in the first half of 2018.

The main part of the bill published by the Ministry of Finance is covered by the glossary, and less attention is paid directly to regulatory issues.

The draft Federal Law “On Digital Financial Assets” defines cryptocurrencies as property in electronic form.

Any operations with digital financial assets, that is, with cryptocurrencies and tokens, are possible only through official intermediaries, such as brokers or exchanges. In the project, they are listed as “exchange operators for digital financial assets,” and should correspond to special requirements.

The use of cryptocurrency in the territory of the Russian Federation as a means of payment is not encouraged, as the Ruble is considered the only payment method.

The Ministry of Finance also refers to smart contracts and electronic algorithms and discusses the conditions under which the parties can exchange money, real estate, shares and other assets in the digital form. It is intended to protect the rights of participants in smart contracts by analogy with the protection of participants in electronic form contracts.

The project needs substantial refinement, as well as some additions that would deal with taxation and other specific issues.

In particular, the authorities might want to introduce registration of cryptocurrency miners and tax this activity. Currently, the bill only defines mining.

The Ministry of Finance expects that the creation of a transparent tax regime for operations with cryptocurrencies will increase tax revenues to the budget.