Economy 4-1 Finance Ministry and its Departments वित्त मंत्रालय और उसके विभाग


Ministry of Finance explained why severely punished for non-declaration of cryptocurrencies

  • Ministry of Finance sees the threat of growth in criminal activity due to cryptocurrencies

  • The cryptocurrency community does not share the regulator’s skepticism

  • Russia still does not have a legal provision on the circulation and trade of cryptocurrencies

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Deputy Minister of Finance of the Russian Federation Alexey Moiseev explained the reason for the harsh punishment for not declaring digital assets

The department insists on criminal liability, because digital assets are often used by criminals in illegal activities. Alexey Moiseev, Deputy Minister of Finance of the Russian Federation, stated this in an interview with Business FM.

The Ministry of Finance explained why it is cruel ...

According to the Deputy Minister, the decision to introduce criminal liability for non-declaration of cryptocurrencies is related to the report of “international analysts” who calculated that the criminal financial turnover has significantly shifted towards cryptocurrencies.

“Both our and international analysts and the European Union published this kind of information that money laundering and, in general, criminal financial turnover shifted either by 4/5, or by 3/4 – by very large volumes in the direction of cryptocurrency turnover..

The Ministry of Finance explained why it is cruel ...

This is the whole difference “, – said Moiseev.

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The deputy minister claims that in the case of bank money everything is different, since “some system has already checked them, where they came from, and so on.”.

Punishment trend

However, such an explanation still did not find support in the cryptocurrency community, which unanimously criticized such a tough decision of the regulator.

The Ministry of Finance explained why it is cruel ...

Maria Stankevich, director of business development at EXMO cryptocurrency exchange, doubts that the provisions proposed by the Ministry of Finance will be applied in practice.

“Unfortunately, the legislative bodies of the Russian Federation do not listen to major market players today, although we have repeatedly sent our ideas and offers of assistance, since we have knowledge of the best world practices,” she said..

Tatyana Maksimenko, official representative of the Garantex cryptocurrency exchange, is not surprised by the Finance Ministry’s proposal, as international financial regulators still fear that cryptocurrencies can be used for tax evasion or terrorist financing.

“I believe that in order to track the purchase of cryptocurrency, it will be necessary to oblige commercial banks to monitor certain accounts and operations, because often purchases (if we talk about small volumes) are conducted through the accounts of individuals in the most popular banks in the Russian Federation,” Maksimenko said.

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Recall that the Ministry of Finance proposes to fine with forced labor for a period of two years or six months in prison if the amount of undeclared crypto operations exceeds 15 million rubles in three years. An even harsher punishment with a term of imprisonment of up to three years awaits those who, twice in three years, have not reported to the tax office on transactions with cryptocurrencies for a total amount of 45 million rubles..

In October 2019, the Ministry of Finance proposed to divide cryptocurrencies into three legal categories for regulation purposes: technical (like Ethereum), virtual (bitcoin, Litecoin) and digital financial assets (tokens issued as part of an initial coin offering (ICO)).

On moment of writing in Russia, at the legislative level, there is no provision on the circulation and trade of cryptocurrencies.

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