Victoria Mitina
Updated: 2019.04.29
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The popularity of cryptocurrencies is growing in the world. Despite the high volatility, more and more investors are thinking about investing money in virtual assets, and the authorities different countries are gradually preparing the legislative framework. For the most part, Bitcoin in Russia remains in the shadows, although many states have already managed to recognize it as a means of payment. But the CIS is also not standing still: new opportunities for the use of digital assets appear, regulators are trying to establish control over this market, and more and more citizens want to understand whether Bitcoin is allowed.
Is Bitcoin Banned in Russia? The official position of the Russian authorities is vague, legal aspects are still under discussion. There is no direct prohibition in the legislation yet, but some precedents quite colorfully illustrate the situation.
For example, the story of the LavkaLavka farming cooperative, which accepts payment in Bitcoins. It is not known for what reasons the law enforcement agencies were interested in this case, but the Lefortovo interdistrict prosecutor's office conducted an inspection and did not reveal any violations of the law in the company's activities. This is a positive example, but there are others.
Bitcoin is not legally prohibited, but it is not permitted either. According to the legislation of the Russian Federation, only the ruble is a national means of payment. It turns out that if someone decides to buy ice cream for Bitcoin, he will go beyond the legal field, which will give government authorities a reason to regard his activities as an attempt to launder money. It is unlikely that buying ice cream will cause such serious problems, but it may attract the attention of law enforcement agencies, especially if other, larger purchases follow the ice cream.
In Kostroma, several young people have organized additional income for themselves. They carried out operations with Bitcoin - they exchanged cryptocurrency for Russian rubles and charged a small percentage for this. During the trial, the participants in the process were given a 2-year suspended sentence for "illegal entrepreneurial activity." The details of the case were not disclosed, but this example clearly demonstrates what happens to those who are trying to make money in Russia on Bitcoins without having prepared the legal background.
Official position of the regulatory authorities
As far as mining is concerned, the Ministry of Finance is already developing a draft law that contains the phrase “making money surrogates”.
How the situation with Bitcoin will develop further is difficult to say.
But you can assess the current state of affairs:
- At the Vnukovo airport, the management noticed power surges at the end of 2017. It is not clear why, but the case was immediately transferred to the FSB. As a result of the investigation, a system administrator was detained, who installed equipment for mining and used electricity at work for free.
- Dmitry Silnov, a former municipal deputy in the Moscow City Complex, organized the work of large mining farms in the basements of a multi-storey building. He consumed a colossal amount of electricity through the general power grids - 300 thousand rubles a month. People living in the same house noticed a strange hum and reported to the police. The swindler was quickly detained and accused of stealing electricity.
- In Crimea, two civil servants decided to combine business with pleasure: they installed software and equipment for mining right in the workplace. For the use of third-party software on the government server, enterprising clerks were fired, while declaring that "they did not have time to earn much." In fact, people lost their jobs not for mining itself, but for the illegal use of state property.
As you can see, miners in Russia make problems not because of the actual mining of virtual assets, but because of the illegal use of equipment, excessive (or illegal) energy consumption and other issues not directly related to crypto.
A logical conclusion from all of the above suggests itself. First of all, it is necessary to properly organize the work of the farm, take care of all the legal aspects of the case, find a way to legalize the mined Bitcoins and protect yourself from possible problems with legislation.
Mining has not yet been taxed, this fact is worth appealing if problems arise. The bill is being developed, but has not yet entered into force.
Regulators' attitude to Bitcoin transactions
Based on the legislation and real cases, it is possible to single out operations with a crypt that will not entail trouble.
What you can do with Bitcoin:
- In theory, it is not forbidden to pay and receive a salary, but there is a risk of being charged with money laundering. In addition, due to the unstable exchange rate, it can turn out to be unprofitable. A currency peg will help to secure transactions and do not forget about the need to pay taxes.
- You can donate Bitcoin, but you can only issue a deed of gift, it will be very difficult to challenge or cancel the transfer. There are no competent lawyers in the field of cryptocurrencies yet, or there are very few of them.
- You can borrow, but it is worth protecting the transaction legally. A simple handwritten receipt, but correctly drawn up, will, if necessary, be valid in court. It is better if disinterested witnesses are present during the certification, and the cost (rate) of Bitcoins is fixed in the text of the receipt.
- You can leave it as an inheritance, but only according to a pre-made will. The law will not include Bitcoins in the inherited mass without a direct indication of the owner, since the crypt is not considered property in the Russian Federation.
- It is impossible to divide in case of divorce - according to the law, Bitcoin is not property. In a legal sense, cryptocurrencies have the same value as air. Officials are considering equating virtual coins to property. But until the bill is signed, you can safely get a divorce and not worry that the ex-wife will present the rights to the crypt.
If the legality of most transactions with digital assets is still controversial, then one thing is clear - cryptocurrency can be stored in the Russian Federation. The authorities tend to compare virtual coins with securities, so it can be assumed that the regulations will be similar in the future. To date, not a single citizen has been attracted for simple storage of virtual currency, not only in Russia, but also in other CIS countries.
Exchange Fiat to Bitcoin and vice versa
The judicial authorities from time to time consider cases in which the use of crypt is recognized as illegal. In 2017, a message was published on the website of the prosecutor's office Sverdlovsk region, clearly clarifying the relationship of the law to Bitcoins. It was said that transactions with virtual coins can be regarded as an attempt to legalize illegal income or as financial support terrorism.
Later, several criminal cases were opened against persons cashing out Bitcoin on a large scale. So in 2017, three entrepreneurs were convicted under Article 172 of the Criminal Code of the Russian Federation, part 2 (illegal banking). These people attracted the attention of the prosecutor's office with a large withdrawal of funds: they exchanged BTC for fiat money in an amount exceeding 500 million rubles.
Over the past two years, the situation has changed slightly, the authorities have become softer towards Bitcoin, and German Gref, the head of Sberbank, said that cryptocurrencies should not be banned, on the contrary, they should try to understand, study and begin to regulate.
It turns out that buying and selling Bitcoins in Russia is not prohibited, but such operations attract the attention of inspection authorities. Miners are mostly saved by the anonymity of transactions, so there are still ways to exchange digital currencies for fiat and vice versa:
- crypto exchangers;
- exchanges;
- from hand to hand.
The principle of operation of exchangers is approximately the same. The user comes to the site, chooses the method of withdrawing BTC from the available ones (QIWI, Yandex.Money, bank card or cash).
A money transfer in the selected payment system occurs like a regular fiat transfer.
But with a cash withdrawal, the sequence of actions is different:
- The user enters the amount of BTC that he wants to cash out and indicates the address of the Bitcoin wallet. At the same time, you can immediately see the rate and the commission, if any.
- Next, you need to conduct a transaction to the specified account.
- After the successful completion of the transaction, the courier delivers cash within a few hours.
It is important to carry out such transactions only through proven services. Unfortunately, at the moment, transferring BTC into cash in this way is only available in large cities.
It is believed that withdrawing Bitcoins through exchanges is safer. To do this, you need to select a service, register there, transfer BTC from your wallet to the balance of the exchange account, exchange crypto for fiat at the current rate (including there are platforms that allow you to exchange for rubles), and then withdraw money to bank card or a virtual account.
Hand to hand
This exchange is the most anonymous, but also quite risky. On the Internet, you can find many ads about exchanging fiat for bitcoin and vice versa. But no one can guarantee that the next announcement will not turn out to be a fraud.
All of these methods work both ways. This is how you can buy Bitcoins and sell them. You can buy not 1 BTC, but any amount - 0.5, 0.1, 1.5 BTC, etc.
How to spend bitcoins in the Russian Federation
The easiest way to spend Bitcoins in Russia is in online stores. Services like Coinmap will help you find a suitable point in your hometown. There you can select a specific settlement and view a list of organizations that accept cryptocurrency. Also, all available establishments can be seen directly on the map.
Not all stores advertise their readiness to accept such a calculation, some agree to accept payment in cryptocurrency only upon direct requests from consumers. For example, the company "Firmingel", which sells skin care products, works according to this principle. Therefore, those who want to find more opportunities to spend cryptocurrency are advised to contact this offer directly in support of their favorite service.
Wheely taxi service operating in Moscow also accepts digital currency. In general, the largest concentration of points where you can spend Bitcoins is located in the capital and other large cities of Russia.
Companies are ready to go to great lengths to attract more customers. That is why there are more and more cafes, clubs, shops and even private hospitals in Russia that accept payment in a crypt.
It is quite easy to pay for international transport and travel services. If you have a couple of Bitcoins in your wallet, there is nothing easier than going to the other end of the world: airlines and hotels around the world have been accepting BTC for several years.
Prospects for Bitcoin in Russia
Decentralization and anonymity make it difficult to bring Bitcoin under the usual Russian regulations. The authorities are trying to adjust the digital currency to the standards of other virtual money, such as Yandex.Money, Webmoney and others. But here they are hampered by the fact that Bitcoin and other cryptocurrencies do not have a single center.
In early March 2019, information appeared that regulators were planning to launch mandatory verification for all cryptocurrency users.
From the new bill follows:
- without special permission, users will not be able to exchange money from bank accounts for virtual assets;
- making cryptocurrency transfers without verification will be considered a “sign” of an illegal scheme;
- all virtual currencies will undergo a special check for compliance with Russian legislation.
According to experts, this law is needed in order to protect citizens from the actions of fraudsters. With the introduction of the new rules, it will be easier to establish the owner of the wallet and understand where the money is being sent. As well previous versions this bill raises some questions:
- the law does not say anything about how the verification procedure will take place and what is needed for this;
- it is not known which authorized body will be responsible for passing this check;
- when it comes to user safety, it is not clear how regulators plan to return funds if they were sent to an unverified fraudulent account (which may well be located abroad).
It is not clear from the document what rights this verification will give:
- what specific assets can be used;
- how many accounts will be allowed;
- what operations can be carried out with assets.
At this time, it cannot be said that the Russian authorities strongly impede the circulation of Bitcoin, but they do not contribute to it either. Sooner or later, a decision will be made, and it is hoped that officials will find a compromise and try to develop regulations on Bitcoin that will not hinder the development of technology and will be convenient for the population. In the meantime, it remains to look at the existing legislation today, try to act within the legal framework and monitor the actions of foreign regulators.
After the Bitcoin exchange rate has consistently updated several highs, confidently breaking through the $ 5,000 / BTC mark, and in peaks exceeding $ 6,000 per coin, Russians who want to get their share of the super-profit began to complain more and more that bitcoins are banned in Russia. At the same time, people who constantly work on the network and, by the nature of their activities, regularly encounter cryptocurrencies, argue that the legislation of the Russian Federation does not say about the prohibition of bitcoins (like other coins). What is the real status of the cryptocurrency and is bitcoin really banned?
The history of the legality of Bitcoin in Russia and the world
The opinion about the prohibition of bitcoin by law is based on periodically appearing loud statements by statesmen about the inadmissibility of free circulation of bitcoin and other cryptocurrencies. It did not start yesterday - the question of how the problem of banning cryptocurrencies itself (and on a global scale) has a long history. But first, about the situation in Russia.
Can bitcoin be banned in Russia
The epic with the possible limitation of the use (and completely circulation) of bitcoin in the country began back in 2014.
Then, in the messages about representatives of the Central Bank of the Russian Federation, for the first time, words were heard about bitcoins and about cryptocurrency in general, as a surrogate for money. The reason for this attitude was the fact that the generation of bitcoins and other coins is carried out, in most cases, anonymously; blockchain technology does not allow obtaining real information about the participants in the process. It also prevents the introduction of centralized control and regulation in such a system. In addition, a number of controversial bitcoin transactions were mentioned.
A little later, representatives of the General Prosecutor's Office made similar statements. Their words were officially pronounced after a meeting of experts, at which officials of law enforcement agencies (the Prosecutor General's Office, the FSB and the Ministry of Internal Affairs) spoke about the need to take measures to protect the financial sector.
In light of such statements, the legality of Bitcoin has indeed come into question.
Really, h. 1 tbsp. 75 of the Constitution countries says that the emission of any money is prohibited in the Russian Federation, except for the national currency (Russian ruble), and only the Central Bank has the right to these operations. Moreover, the use of the concept of "surrogate" by officials could become a direct reason for the fact that bitcoin would be banned in the Russian Federation - according to the current legislation, it is prohibited to issue monetary surrogates in Russia (this is stated in Art. 27 of the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)" 86-FZ adopted on July 10, 2002).
However, in the first case, the statement was announced only by the press service of the Central Bank, and, accordingly, had the character of an informational one, and as a document (order) obligatory for execution, it was not drawn up. The text only mentioned recommendations to refrain from using cryptocurrency. As for the statement of the GP, it appeared exclusively in the news feeds, which in itself testifies to the non-binding nature of the recommendations.
The passions did not subside on this - the Gosnarkokontrol took up the baton. Literally a month after the above statements, his department reported that cryptocurrencies, including Bitcoin, are actively used when buying drugs, being practically the main means of payment for drug dealers.
All this led to the emergence of the initiative of the Ministry of Finance, which proposed to develop a bill on the regulation of cryptocurrencies... It should provide a definition of "monetary surrogate", and establish prohibitions and a measure of responsibility for violators. The grounds were put forward theses about the lack of security for bitcoin and its instability relative to other currencies.
The arguments are, frankly, weak.
- Times of the "gold standard" when any currency was backed by precious metals are long gone. Moreover, most of them are not even provided with goods or services. A striking example of this is the most popular world currency (US dollar), which is actually uncontrollably issued by the Federal Reserve System, which has the status of a private organization.
- There is no need to talk at all about the stability of some currencies relative to others - since the beginning of the century, almost every one of them has demonstrated ups and downs in rates of tens of percent.
Actually, the bill was rejected at the stage of discussion. The Ministry of Economic Development said that the wording was vague, which could have led not so much to streamlining the issue of cryptocurrency as to problems in the marketing programs of start-ups and large companies, disorganization of the work of financial structures.
The first law on cryptocurrency in Russia
The fact of a direct ban on bitcoin in Russia was noted in September 2014. Although this event was only of a local nature - the Nevyansk City Court of the Sverdlovsk Region ruled to block resources related to the mining and circulation of bitcoin (Bitcoin.it, Bitcoin.org, etc.), a precedent appeared in court practice.
It should be said that the ban did not last long - in 2015, the Sverdlovsk Regional Court overturned the ruling of a lower body.
In fact, this ban is still the only one in the history of bitcoin in Russia.
What will happen for the use of bitcoin: criminal liability?
In 2015, the Ministry of Finance presented a revised draft law. It turned out to be much tougher than the previous one, and provided for real responsibility for the use of cryptocurrencies in general and bitcoin in particular.
The tightening trend continued in the next year, 2016.
The head of the RF IC, A. Bastrykin, spoke in favor of harsh penalties for those who use bitcoin and its analogues. The arguments were no different - again there were words about an ideal instrument for fraudulent actions and speculative operations, the possibility of issuing by individuals anonymously and without restrictions. The official forgot only about one thing - the maximum number of coins in circulation is limited by the bitcoin system itself (more than 21 million of them cannot appear physically).
In the Ministry of Finance's version of the bill, a measure of responsibility for violations with real terms of imprisonment appeared.
The situation persisted until the summer of 2016, when, unexpectedly for many, the trend reversed. It turned out that blockchain technology can bring considerable benefits:
- To speed up and simplify financial transactions.
- When identifying users of various resources.
- When introducing a digital signature system.
- When working with various registers, for example, real estate or land registry.
However, adopting the technology and banning the use of bitcoin in Russia and other cryptocurrencies based on it is nonsense. As a result, amendments to the bill appeared again:
- The Ministry of Finance proposed to equate bitcoin and analogs to foreign currency.
- Operators using blockchain technology and, accordingly, working with cryptocurrencies were proposed to be exempted from liability.
In a word, until the bill became a law on the regulation of cryptocurrencies, the current state of affairs remains.
Bitcoin's legal status today: allowed or prohibited?
What is the real state of affairs in relations between cryptocurrencies, the state and users in the world and in Russia?
World practice: foreign experience in legalizing and banning cryptocurrencies
The blockchain technology used by cryptocurrencies implies almost instant execution of transactions between system participants (the time required for confirmation is not taken into account), the anonymity of transactions and the impossibility of outside interference. Naturally, this is welcomed by users, as evidenced by the continuous growth in the popularity of bitcoin and similar instruments, an avalanche-like increase in the number of participants.
Governments and central banks by their very nature cannot approve of the development of such a system. However, regardless of their opinion, it has been successfully operating since 2009. As a result, a situation has developed where it is impossible not to react. The reaction itself, not only in Russia, but also in the world, is far from unambiguous:
- In the United States, in July 2017, the SEC (Securities and Exchange Commission) adopted a decision equating ICOs with a securities issue. In the same place, since 2014, in taxation (by the decision of the Internal Revenue Service, in force since March 2014), transactions with bitcoin are considered as transactions with property.
- In Canada and Australia, as in the United States, an initial public offering is considered to be the same as an issue of securities.
- In Switzerland, cryptocurrencies are treated as foreign currencies. As a result, this country has become one of the most attractive options for ICOs.
- By the European Court of Justice on October 22, 2015, transactions in cryptocurrency are equated to payment transactions, and, accordingly, are exempt from VAT.
- Bitokin has been fully legalized in Japan - operations are legal, and the decision on settlements in cryptocurrency is left to the seller and the buyer for consideration.
- In China, on the contrary, the state is confidently moving towards a complete ban on bitcoins. In September 2017, representatives of the central bank made a statement that the overwhelming majority of ICOs (we are talking about more than 90%) can be attributed to illegal financial activities, and they banned the initial placement. Moreover, it was reported that all Chinese cryptocurrency exchanges are required to cease operations by September 30.
10 countries where bitcoin is prohibited
There is no reason to say that cryptocurrency is prohibited on the territory of the Russian Federation. Accordingly, what is not prohibited is allowed, but:
- Official status bitcoin and other cyber money so far does not exist;
- The only legal means of payment on the territory of the country is the Russian ruble, therefore, when asked whether whether it is legal or not to pay with cryptocurrency for purchases in Russia, the answer is unequivocal - NO!
- In accordance with the above legislative acts mining bitcoin and other crypto money on the territory of the country can be considered (if the user's equipment or farm is located exactly here) illegal operation.
- Citizens not prohibited buy bitcoin and analogs for rubles or foreign currency.
- Same way there are no restrictions to create appropriate e-wallets and the use of digital currencies as a store of value.
- Calculations on foreign sites accepting bitcoin do not belong to the jurisdiction of the Russian Federation, respectively, all purchases in such online stores and on trading platforms for bitcoins or other cryptocurrencies are carried out by Russian citizens legally.
Perhaps with the adoption of the law on the regulation of cryptocurrencies, the situation will change.
The past 2017 was marked by many important events, both economically and politically. Of all the economic news, the first plan was reports of an unprecedented rise in the rate of the electronic currency bitcoin. He plunged many into amazement and regret that they did not board this departing train of wealth in time. Other opinions were full of skepticism, right up to concerns over whether bitcoins would be banned in Russia.
Many believe that bitcoin is another tulip mania, the Ponzi pyramid, or something reminiscent, known to many Russians under the MMM. However, everything turned out to be not so simple, because until the moment when almost $ 20,000 was given for one bitcoin on cryptocurrency exchanges, it periodically appeared in various news. This time, everything is much more serious and it is not for nothing that many official authorities began to express some concern. Which was aimed not only with respect to bitcoin itself, but also with the appearance on the markets of many other cryptocurrencies.
Some more advanced and developed countries have adopted this new technology cryptocurrency market. First of all, these are Japan and South Korea. Others, following the traditional view of the role of the state, began to express very strong concerns. There were proposals to ban the use of bitcoin, and its circulation, as was done in China. Other governments have adopted a wait and see attitude.
Many governments view Bitcoin legalization as a real threat to the economy
Russia, or rather its monetary authorities, did not invent anything new either. Feeling a certain danger to their financial system, they began to take the first steps to bring under their control both the entire cryptocurrency market and Bitcoin in particular. In this regard, many have 3 main questions:
- What legal innovations have been invented by the Russian government in relation to cryptocurrencies and what is the legal basis for bitcoins in Russia?
- Is Bitcoin allowed and how can legislative provisions affect the development of the digital technology market and modern payment systems in Russia?
- What should be prepared for those who decide to invest or trade in the cryptocurrency market?
Why is the state afraid of bitcoin
Without going into unnecessary technical details of what the bitcoin technology is based on and how the peer-to-peer financial transaction system (blockchain) works, we can already state that bitcoin is a fundamentally new structure of relationships between people, a private person with the corporate sector, any person with the state. ...
So what are the features of bitcoin that many states preferred that it never appear again:
- firstly, bitcoin, as a currency, does not have a single emission center, i.e. is completely decentralized, which allows it to avoid control from anyone else. Nobody can print enough of it to cover the losses. There is no one who could indicate what rate bitcoin should have today, tomorrow or by the next presidential election. Lack of control is the main advantage of bitcoin over other monetary systems.
- secondly, bitcoin allows you to carry out financial transactions in real time for several tens of minutes and even hours, but not for several days, as is usually the case in traditional bank money transfers.
- thirdly, all financial transactions are virtually anonymous, where the sender and recipient have their own number identifiers (wallet numbers). This creates a clear inconvenience for governments to keep track of who transfers money, how and where (a complete replacement for clearly compromised banking secrecy). Here, allegedly, there is a fight against the financing of terrorism (although it was financed no less successfully before the advent of any Internet) and drug trafficking. In fact, governments are concerned that these private-to-private financial flows are passing by the government's tax system.
- Fourthly, the use of bitcoin allows you to build a blockchain settlement system between any counterparties without resorting to the services of many intermediaries in the form of banks, brokerage companies, insurance agents, lawyers and other assistants who want to speed up financial settlements. Those. payment for goods and services is carried out directly between the buyer and the seller and the role of the guarantor of the fulfillment of the obligation under the transaction (almost any) is assumed not by the broker or agent in the form of a bank, but by the system itself, i.e. collective community. This practically eliminates the risk of fraud, unfair performance of an obligation.
Bitcoin is a free cryptocurrency, almost impossible to control
Russian legal specifics
As can be seen from all that has been said, any state has something to worry about so as not to completely lose control over financial flows both within the country and in the field of cross-border financial transactions. That is why in Russia, as in other countries, a course has been taken to bring under control the emerging powerful technological trend, which, however, has never been possible for any state.
As mentioned earlier, many governments immediately took unequivocal prohibitive measures against all cryptocurrencies. Others began to follow the path, if not a complete ban, then the establishment of an acceptable system of control. To understand the logic of the development of events on the territory of the Russian Federation, why and how the government acts, you need to look into the main document of the country, the document of the country - the Constitution of the Russian Federation. It is to her, in general, that all officials refer.
Article 75 of the Constitution of the Russian Federation says that the currency of the Russian Federation is the ruble, and the issue (issue) Money carried out EXCLUSIVELY by the Central Bank. It was also noted that it is possible to manufacture other financial instruments.
In this logic, in principle, nothing prevents the government itself from issuing its own cryptocurrency, which, in particular, is much talked about. As expected, a digital analogue of the ruble - the crypto-ruble - will be released soon. Here, by the way, it should be noted that the first country to issue its state cryptocurrency is Venezuela. There, from January 1, 2018, a cryptocurrency - "petro", will operate, whose rate is tied to the cost of a barrel of oil produced in the country.
Legal regulation of cryptocurrencies in Russia
As if the Russian monetary authorities are trying to seize the initiative from bitcoin. However, the question is, who will need such a cryptocurrency? Indeed, in fact, it differs little from the usual ruble. And it can also be released as much as needed to cover, for example, the federal budget deficit.
However, in addition to this, one might say, passive attitude towards bitcoin, decisive steps were taken to put bitcoin, in general, outside the law. One of such serious legal documents or laws on bitcoins is the "Information Letter" of the Central Bank of the Russian Federation dated 01/27/2014. It is called "On the use of" virtual currencies "in transactions, in particular Bitcoin".
This document speaks of the impossibility of accepting bitcoin as an official payment instrument of the Russian Federation, which, however, has some legal conflict. Bitcoin does not have any geographic reference - it is an extraterritorial electronic currency. It functions in the global information network and has little to do with either Russia or any other state.
Russian law prohibits the use of bitcoin
The next document that forms the legislation of the Russian Federation on cryptocurrencies is article number 27 of the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia)". It notes that the production of financial surrogate financial instruments is not legalized in the Russian Federation. Those. here it is explicitly stated that any monetary asset that does not have an official status is outlawed and formally. We can say that bitcoins are banned in Russia.
It is with these two documents that the real persecution and prohibition of bitcoin on Russian territory, as an electronic unit of account, begins. In addition to the circulation of bitcoin, cryptocurrency mining is also prohibited. There are already several real criminal cases that are related to bitcoin mining. Cashing out through special cryptocurrency exchanges, exchange resources and wallets is also punished.
Other legislative acts
The General Prosecutor's Office of the Russian Federation has also been very actively involved in this case. In her notification dated February 7, 2014, she directly announced measures to counter illegal money circulation in the territory of the Russian Federation, including everything related to bitcoin and other cryptocurrencies.
Another state body of the Russian Federation was also actively involved in the prohibition of bitcoin. On February 25, 2014, from the head of the State Drug Control Service (now this law enforcement structure is part of the Ministry of Internal Affairs), it was noted that the use of bitcoin in the drug trade is actively growing.
The Ministry of Finance of the Russian Federation followed the same path. In 2015, he introduced a bill providing for criminal punishment for the storage and production of cryptocurrencies on the territory of the Russian Federation (addition to Article 147 of the Criminal Code of the Russian Federation).
In January of the same year, the Investigative Committee of the Russian Federation reacted cheerfully to this initiative. In the person of its head A. Bastrykin, who proposed to introduce criminal liability for illegal circulation of cryptocurrencies in the Russian Federation (January 2016).
However, this pressure from the power departments and control bodies was significantly mitigated by representatives of the economic bloc of the Government of the Russian Federation. They began to propose not a complete ban, but a form of soft control over crypto markets and the use of bitcoin. So, in particular, in August 2017, the presidential adviser on information technology German Klimenko, proposed to create a special council under the Government of the Russian Federation on cryptocurrencies. At the level of the expert community (the Russian Association of Blockchain and Cryptocurrencies - RABIK), it would offer effective measures to control and use cryptocurrencies in business.
In September 2017, the legality, last news bitcoin, were announced at a meeting of President Putin with the financial community. A proposal was voiced to legalize cryptocurrencies, but the head of the Central Bank of the Russian Federation Elvira Nabiulina strongly opposed such an initiative. This is due to the fact that such a step will lead to the collapse of the national financial system. Strange, for some reason nothing has collapsed in Japan so far, although bitcoin was legal there already in 2015.
Criminal liability is provided for mining and using cryptocurrency
Possible Measures Against Bitcoin
Summarizing all the directions of the policy of the Russian state aimed at bitcoin and cryptocurrencies, the following measures are possible:
- all ways of illegal use of bitcoin on the territory of the country will be blocked, including through the closure of the sites of exchangers and crypto wallets. This measure is ineffective, since there is one closed cryptocurrency resource. Dozens of new ones will be created, since no one has canceled the work of such anonymous access technologies as VPN;
- Attempts will be made to create Russian analogs of the cryptocurrency. Moreover, both at the state and corporate level, primarily by banks and large corporations... But the effectiveness of this path is also questionable, since there will be too limited a group of users of such a currency;
- as the economic crisis develops both in the world and in Russia, all attempts to operate cryptocurrencies in the market will be strictly suppressed. This will lead to his going into the shadows or into the "dark Internet", where there is no state control.
Having considered all the above arguments for and against that are in the legal field of Russia, of course, the conclusion suggests itself - in the near future, one should not expect the full legalization of bitcoin. The question of whether this is legal is still open. At the same time, the use of cryptocurrencies in the course of work on world markets, even from the territory of the Russian Federation, has no legal consequences. Unless it is envisaged to pay for services or goods using digital money that does not have an official status.
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The popularity and ubiquity of cryptocurrencies required the Russian authorities to regulate a new area. But a consensus on how to deal with virtual money and whether it is legal to use it was not immediately developed. Even now, some public institutions and individual politicians doubt the decision.
Therefore, holders of cyber money should closely follow the news and try not to miss information about electronic currency. And those who are just going to open an account should find out if bitcoins are banned in Russia or not in 2020. Such information will allow you to timely prepare for surprises and avoid possible problems that no one needs.
Those who want to start a wallet and purchase cryptocurrency do not need to worry. So far, virtual money is not prohibited. Moreover, despite several explicit attempts to prohibit their distribution and use, this area remains without legislative regulation.
But it should be remembered that the absence of a prohibition does not mean permissiveness.
Such a large-scale area cannot remain without the control of the authorities, therefore, certain norms and laws will certainly appear.
In the meantime, holders of crypto money are able to dispose of them at their own discretion. Only fraud, money laundering and economic crimes, which are associated not only with the virtual sphere, but affect the entire financial sector, remain inadmissible.
Why bitcoins are banned in Russia: history
Despite the fact that bitcoin is legal in Russia, more recently they have been actively banned.
The pressure on the cyber currency began in 2014, when the first law appeared, which spoke about the undesirability of such a financial instrument.
A little later, the first sites telling about virtual currency were blocked, and after a while a more stringent draft took the place of a recommendatory, vague law.
Its authors motivated the prohibitions and the introduced criminal liability high level anonymity of electronic money, which allows you to hide the transactions from the official authorities. As a result, law enforcement officers were able to pursue the owners of bitcoins and other cryptocurrencies.
Bitcoin law in Russia
As mentioned above, there is no full-fledged regulation of electronic finance in Russia. But individual laws are already emerging and functioning. Their main message is the lack of responsibility for the use of cyber money.
At the same time, softening took place in 3 stages:
- the spread of blockchain technology has led to the need to recognize cryptocurrency;
- the legislator exempted the owners of wallets and online services from criminal punishment;
- a little later, financial transactions became available to ordinary users.
Please remember that the permission obtained must not lead to abuse. Bitcoins have been and remain a surrogate currency, which is prohibited from making payments on the territory of the country. But, since payments with cryptocurrencies are only possible on the Internet, the Ministry of Finance is showing tolerance and loyalty.
An additional support for the owners of electronic finance was the lack of a clear definition of the concept of a surrogate currency.
What's in other countries?
Speaking about other countries, it is worth immediately dividing them into 3 categories, which differ in the chosen approach to the regulation of the sphere:
- China;
- Western Europe;
- USA and Japan.
In China, all dubious or unconventional finance is completely banned. Their use and storage in any form and type is not allowed. But this does not prevent large Chinese tycoons from remaining the largest holders and users of cyber money.
In Western Europe, they decided not to complicate the situation and simply allowed the use of virtual payment systems of all forms and types. Only illegal financial transactions and criminal offenses are prohibited.
The USA and Japan reacted to the current situation with pragmatism.
The only requirement that owners are required to comply with is the need to pay income tax.
The current state of affairs in Russia
Those who still doubt the availability of bitcoin in Russia and the legality of 2020 should take a closer look at the activities of large financial companies.
Some popular payment systems, including WebMoney, added bitcoins to the list of acceptable currencies and created separate wallets for them. Now everyone can purchase cyber money legally.
An additional proof of the availability and official recognition of crypto money was the appearance of appropriate instruments in the trading terminals of forex brokers.
Anyone can make money on the bitcoin, litcoin or ethereum rate. The main thing is to have money to open your account on the financial exchange and to understand the peculiarities of foreign exchange trading.
Naturally, both web wallets and brokers have set some restrictions that prevent you from taking full advantage of cyber finance. But this is due to the activities of these companies, and not laws.
Forecasts for the future
It is incredibly difficult to give an accurate forecast for the future. On the possible solutions many factors can affect. But the latest news contains troubling notes.
The rapid spread of mining has led to the fact that many people try to try their own hand in this area. This is of concern to financiers, who are increasingly claiming the need to regulate such activities.
Some of the most demanding and harsh economists demand that this activity be limited to only experienced and wealthy individuals.
It is proposed to level mining and trading on financial exchanges, which will make the former inaccessible to most users.
But a complete ban on cryptocurrencies will not follow. They have become an integral part of modern world that cannot be left aside or forbidden. Therefore, it is much wiser to make virtual transactions legal and begin to control at least part of the transactions, than to finally drive cyber money underground.
There are many legends about cryptocurrency and the legality of its use in the Russian Federation. Some claim that Bitcoin is banned in Russia, and the legislative consolidation of this status is only a matter of time. Others say that cryptocurrency has a great future, and the new law of 2018 will provide it with a stable position in society. Below we will consider how the history of regulation of virtual money in Russia developed, what awaits them in the future and what are the subtleties of the new bill, which is being prepared for consideration in the near future.
Banning Bitcoin - the history of cryptocurrency from a regulatory perspective
Despite the creation of Bitcoin back in 2009, the first statements about the use of cryptocurrency in the Russian Federation appeared five years later - in January 2014. Since that time, there have been many events related to the issue of virtual money. What awaits them - legalization or a complete ban? Let's take a quick look at the history of the “confrontation” between government regulators and cryptocurrency over the years.
year 2014
At the end of January, the Central Bank of the Russian Federation officially warned users of digital currency (in particular, Bitcoin) against their use. The argument of the regulator was the anonymity of the cryptocurrency, which is why it was often used to conduct dubious transactions. At the same time, a link appeared in the Federal Law on the prohibition of monetary surrogates in the Russian Federation. At the same time, the statement of the Central Bank looked like a recommendation, not an instruction, so few of the users took it seriously.
Already in February 2014, statements by the Prosecutor General's Office of the Russian Federation appeared based on the results of a meeting of large law enforcement agencies of the country (including the Ministry of Internal Affairs and the FSB). As in the case discussed above, the speech concerned the risks of using virtual money, and the information was presented from the perspective of a recommendation. At the same time, an anonymous source said that for the use of cryptocurrency, an article on money laundering can be applied to the violator (according to p. 174 of the Criminal Code of the Russian Federation). But, despite such harsh statements, there was no talk of a complete ban on Bitcoin.
At the end of February, the leadership of Gosnarkokontrol spoke out on the topic of virtual currency. The statement noted that Bitcoin is used more often than other funds to trade illegal goods.
As a result, in October, the first plans to introduce penalties for the use of cryptocurrency in general and Bitcoin in particular were announced:
- For legal entities - from 0.5 to 1 million rubles.
- For individuals and citizens in office - from 50 to 100 thousand rubles.
In December, an analysis of the considered proposal was carried out, after which it was abandoned. The reason is that not only Bitcoins could fall under the ban, but also a number of marketing programs, which could cause large enterprises and banks to suffer. The final document was amended, but the mentioned norms and prohibitions remained unchanged. The updated version of the bill was approved and approved by the Ministry of Economic Development of the Russian Federation.
2015 year
In 2015, discussions continued about a possible ban on Bitcoin in Russia, but it did not come to drastic measures. Roskomnadzor got down to business, which on January 13 blocked and added a number of sites to the list of prohibited resources - Bitcoin.it, Bitcoin.org and other sites related to Bitcoin. The basis for these actions was the decision of the City Court of the Sverdlovsk Region, issued at the end of September 2014.
A resonant event in the cryptocurrency world was the addition of the resource "Zuckerberg will call" to the Unified Register for the material about the Bitcoin cryptocurrency, released two years earlier. The Astrakhan court considered that the text of the material contains propaganda that inclines readers to tax crimes.
In June, there were suggestions that the Central Bank of the Russian Federation planned to consolidate the legality of Bitcoin in Russia and even allow its use, but such assumptions remained rumors. No further steps were taken in this direction.
2016 year
In January 2016, the head of the RF IC, A. Bastrykin, announced plans to introduce criminal liability for the use of Bitcoin. Already in the spring, the Ministry of Finance of the Russian Federation proposed a tougher punishment for the extraction of virtual coins:
- For individuals - up to 4 years in prison.
- For heads of enterprises - up to 7 years in prison and a fine from 1 to 2.5 million rubles, as well as a ban on holding certain positions for up to 3 years.
In the summer of 2016, a lot of work was done to block news and other sites about Bitcoin. The basis was the decision taken by the Vyborgsky District Court. The site owner tried to challenge the decision already in 2017, but to no avail. The court did not even begin to consider the case on the merits, because it considered that decision in no way violates the rights of the owner.
At the end of 2016, the head of one of the departments of the Central Bank of the Russian Federation noted that it is important to be flexible on the issue of cryptocurrency. If you prohibit virtual money inside the country, they will go outside the country. As a result, the level of security of the financial system will not increase, as many assume, but will decrease.
2017 year
Many events around the cryptocurrency and its ban unfolded in 2017. On January 19, the EXMO resource (an exchange platform for trading various cryptocurrencies) was blocked. The reason was the decision of one of the judicial authorities of St. Petersburg, issued back in August last (2016) year.
In April, a number of forums were held related to blockchain technology and cryptocurrency. At one of them, V. Kalukhov said that Bitcoin is not prohibited, and such actions are not yet planned. Moreover, it was reported that the legalization of virtual coins is expected in 2018.
Already in May, information appeared from insiders that Russian banks and the Russian Ministry of Finance were discussing the creation of internal cryptosystems. Already in June, the first projects were developed aimed at obtaining their own cryptocurrency based on blockchain technology. Despite the active dialogue, the experts admitted that the resolution of such an issue will take from 2-3 years, no less.
Before that, there were news about the desire of the Ministry of Finance to make cryptocurrency a legal means of payment, giving Bitcoin the status of digital money (to control the issue). It was planned to submit the draft changes in this matter to the Duma for consideration by the end of 2017, but in reality this happened only in 2018 (more on that below).
At the end of May, Deputy Chairman of the Central Bank of the Russian Federation O. Skorobogatova, speaking before the State Duma, proposed introducing a tax on the use of virtual money and giving it the status of "digital", as noted above. The deputy chairman proposed to control cryptocurrencies, which caused a number of discussions in various ministries (finance, economic development, and others).
At the end of August, the adviser to the head of the country informed the public about the desire to create a Russian version of the blockchain and virtual coins association. According to the plan, the goal of such an organization will be the introduction of blockchain technology, work with regulators and the implementation of comprehensive measures to legalize virtual money. It is planned to create three committees, each of which will solve specific tasks - for the extraction of cryptocurrency, for the ICO, as well as for the blockchain.
At the same time, the Ministry of Finance of the Russian Federation made statements about the ban on the sale of Bitcoin to individuals. The representative of the ministry noted that in the future it is planned to equate virtual coins with financial assets with their subsequent sale at the Moscow Exchange. Rosfinmonitoring will act as a supervisory authority.
According to an employee of the Ministry of Finance, trading with virtual money will be available only to experienced investors. Like other issues, this nuance is planned to be considered with the participation of representatives of the Moscow Exchange and the Central Bank of the Russian Federation. The ultimate goal is to make the asset available, but only on the said exchange platform, by closing access to it from private individuals. According to employees of the Ministry of Finance, this approach will reduce to a minimum the number of illegal in the network.
Another thought about the legalization of Bitcoin was voiced at the meeting of the President of the Russian Federation with entrepreneurs. At the same time, the head of the Central Bank of the Russian Federation E. Nabiullina noted in her commentary that she does not accept innovations and considers such actions to be ineffective.
At the end of September, M. Kaiser (a well-known expert in the field of finance) noted that in the future Russia could become a leader in financial matters. According to him, sources in the highest echelons of government have indicated a desire to admit Bitcoin to the market and make it a legal currency. In turn, A. Kudrin (the former head of the Ministry of Finance of the Russian Federation) noted the effectiveness of such a step as the legalization of the blockchain.
The idea of regulating virtual money was once again voiced in October - at a meeting with V.V. Putin. The President of the Russian Federation noted that in the matter of legalizing Bitcoin, it is important not to build additional restrictions, but to create optimal conditions for the development of the country's virtual financial system in order to protect the interests of the country and its citizens.
In the second half of October, I. Shuvalov (Deputy Prime Minister of Russia) noted that ICO promotion is an excellent chance for businessmen to find funds to implement their business plans. He noted that in this matter it is important not to limit the cryptocurrency network, but, on the contrary, to create optimal conditions for its operation in the country.
Subsequently, information appeared on the Web about the desire to create patent taxation in relation to the mining of virtual money. This is due to the fact that the mining of Bitcoin and other cryptocurrencies is a commercial activity, so paying taxes is a must.
In the fall of 2017, there was a wave of messages about the government's desire to prohibit equipping farms for mining virtual currency at home. The problem was considered at a meeting of the working group dealing with global network under the President of the Russian Federation. The reason for the discontent was the high energy consumption of mining farms, which creates risks for other citizens living in multi-storey buildings.
On the other hand, there were opinions that the mining of virtual coins should be encouraged, but it is important to establish business in regions where there is a cold climate and there is no power shortage. The best option called the Irkutsk region, where the cost of 1 kWh is about 1 ruble.
Will Bitcoin be Banned in 2018?
Discussions about the cryptocurrency flared up with renewed vigor after the news of the appearance in the State Duma of the Russian Federation of a bill on virtual money. Many were wondering what to expect from the MPs - whether Bitcoin will be banned or a regulatory system will be introduced.
The essence of the bill
Based on the conditions of the new law, the citizens of the Russian Federation will have cryptocurrency available on special exchange platforms, but it is still prohibited to use it to pay for goods on the territory of the country. The innovations also apply to miners, who will have to register as individual entrepreneurs and pay taxes, like other entrepreneurs.
In addition, the bill introduces definitions of virtual money - cryptocurrency and tokens. The document notes that the mentioned coins belong to the category of property that has electronic view... The difference between the terms lies only in the version of extraction and the essence of money. By definition, cryptocurrency is built on technology (personal base). As for the tokens, they use the platform on which they are developed as the basis.
The bill states that virtual money (regardless of type) cannot be used for payment. The ban is valid on the territory of the Russian Federation. This is due to the fact that the only means of payment in the country (by law) is the ruble. At the same time, the Central Bank of the Russian Federation does not plan to change the rules for cryptocurrency.
But this is not the only reason why virtual money cannot be used as a payment instrument. The authorities are afraid of losing control over Russians' finances and money making. Generally speaking, according to the new bill, Bitcoin and other digital coins are equated to financial assets, and transactions with such money can only be carried out through officially registered legal entities- with a dealer or broker license, as well as trade organizers.
There are no restrictions on the purchase of cryptocurrency in the draft law yet. In the previous version, it was mentioned that investors without legal status within the same emission have the right to buy virtual coins in the amount of no more than 50,000 rubles. (equivalent). At the same time, the Central Bank of the Russian Federation allowed investors to spend amounts of no more than 0.5 million per year.
Special attention is paid to miners who, upon entry into force of the bill, will be able to work only officially - by creating an individual entrepreneur or legal entity. You cannot just buy farms for mining coins and mine coins at home without registration. The search for violators is planned to be carried out when the tariff for electric energy is exceeded within a 3-month term. The RAKIB Association criticized the bill. Its representatives assure that this approach will lead to a decrease in the number of miners in the country and slow down the development of the cryptocurrency industry. The Association noted that today it is important to create general rules for regulating virtual money together with countries from the CU.
By the way, cryptocurrency is legal in Belarus and it can be mined, sold and bought without paying taxes to the country. In addition, the government is allowed to exchange virtual money for the national currency and other fiat currencies. Besides Belarus, the only country that has recognized virtual money is Japan.
National Bitcoin Exchange
In April 2018, there were rumors about the creation of the official BITEX exchange platform by the end of the year. If you believe the first information, only three virtual coins will be traded on the exchange - the crypto-ruble, Ethereum and Bitcoin. The operator's role will be taken over by a large banking institution, which has not yet been determined. It is planned that it will be a financial institution associated with NSD or the Moscow Exchange. The main stumbling block is the lack of clear laws in the field of cryptocurrencies. Interestingly, the BITEX exchange is already operating in Argentina.
No sooner had the news appeared on the Web than the denials had already gone. Thus, E. Sidorenko (head of the risk assessment group in the sphere of circulation of virtual coins) noted that such statements are untrue. The reason is that it takes three things to open an exchange:
- The consent of the authorities to exchange cryptocurrency for fiat money.
- Adoption of FATF AML rules.
- The willingness of banks to take the hit and come to terms with increased volatility.
Should we wait for the Bitcoin ban in Russia?
Taking into account the foregoing, we can conclude that the Government of the Russian Federation and the deputies are determined to regulate the cryptocurrency market, and not impose strict bans. However, according to experts, the new bill requires a number of improvements. Experts assure that the main problem will be tax collection from miners due to the difficulty of identifying them and the high volatility of the cryptocurrency.
Generally speaking, the legalization of virtual money could be the impetus for helping with funding. This niche can include banking institutions, investment companies and private investors. It remains to be seen what the fate of the new bill will be.
More about the ban on cryptocurrencies in Russia - the opinion of Denis Borisov:
