Russia Follows USA to Tighten Cryptocurrency Regulation

The Russian Parliament has started finalizing a draft bill on cryptocurrency and digital tokens recognising them as assets that cannot be used in exchange for goods and services.

The draft aims to define the scope of the regulations of cryptocurrencies, not their prohibition, according to the officials. Furthermore, the draft bill provides definitions of such concepts as digital assets, digital transaction, digital signature and smart contract. It also establishes the legal basis for implementing new types of activities, which include mining and validation.

The draft law allows exchange of digital tokens or cryptocurrency for rubles or foreign currency only through special operators, including brokers and special platforms.

According to the author of the bill, the tightening of the regulation is caused by the increase of scams and fraud, which moreover may finance illegal, prohibited actions. More than 90% of recent ICOs were allegedly used for fraud or illegal fundraising.

Earlier this month, the first ICO criminal case in Russia was submitted against Bananacoin. An investor in Bananacoin has accused the organizers of the crowdsale of embezzling the funds raised from the ICO. Reportedly an investor from the Moscow region, who invested in bananacoins, accused the founders of fraud. According to the report, after the investor bought 1037 tokens, the investor researched the project and found that he was misled. Allegedly, while the photos were real and the plantation exists the information was used without permission. Prior to the  ICO, BananaCoin received significant media attention simply due to its outlandish name. The ICO was said to have raised more than $3 million.

According to the draft legislation, to participate or invest in the trade of tokens, people must have a certain qualification. According to the draft bill, the individuals who are not registered as qualified investors are only allowed to invest 50,000 rubles ($900) in an ICOs.

The draft bill has received mixed feedback from market experts.


 

Marina Evseeva is a former journalist for the Russian news agency RIA Novosti. She is an expert on Fintech and digital financial services, and a cryptocurrency researcher.


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