Russia is proposing a new law to declare cryptowallets or be fined, go to jail

[bbc.reporter]

This might be the beginning and it might set a precedent for other countries to follow and impose strict regulations on the users. They do not want the users to have the ability to launder our own money and evade taxes on our own.

However, there are cryptocoins I know that not any government authority can track hehehe.

 

Russia’s Ministry of Finance (Minfin) has prepared a new draft bill on the regulation of cryptocurrencies which, if it comes into effect, would force residents to declare their crypto wallets—or face up to three years in prison, local news outlet Kommersant reported today.

According to the proposal, any individual or legal entity that received more than 100,000 rubles (roughly $1,300) worth of crypto per year should be obliged to notify the tax authorities and submit a corresponding report. In case of non-compliance, violators would face a fine of 30% of the amount received—but no less than 50,000 rubles ($650).

If over one million rubles ($13,000) in crypto should “pass-through” an undeclared crypto wallet in a year, its owner could be facing up to three years of prison time or a community sentence, proposed the document.

Read in full https://decrypt.co/42809/russia-proposes-up-to-3-years-of-jail-for-undeclared-crypto-wallets

[hatshepsut93]

Russia and other countries always propose some laws, some of which can be pretty impactful, but until it has actually passed, it's just a proposal, and regarding Bitcoin, there has been countless proposals that remained proposals, so this might be just another one. Though there's no doubt that the Russian government is generally anti-crypto, it's just not clear yet how far they will go in terms of making things hard for crypto users.

[PonZZ]

It sounds like crypto is legal in Russia, but it's banned in fact. I meant that they won't be able to use Bitcoin as a payment method soon. Russian crypto law is associated with a phrase "To kill two birds with one stone".
P.s. Will holders with declared wallets be able to use bitcoin mixers?

[Mpamaegbu]

This type of news isn't anything new. People should always expect such, especially from countries with draconian laws. Russia isn't a populist state to me and I don't regard her as a democracy even though she may have her elections. I read another sad one here from Russia a day ago about its palaver with the Binance exchange Roskomnadzor blacklists Binance in Russia. All these aren't pleasant stories and like I maintained in the other thread it's a gradual attempt to cripple the crypto business in Russia. However, this attempt is coming a bit late. If we had had this type of backlash pre-2017, may be it would've given a lot of people great concern because those were the era on uncertainty in this industry. But I am not sure the expected effect will be anything now. China banned cryptocurrency in 2017 and that staggered the industry a bit then but we have moved passed that now, and China is left behind in the game. Russia may suffer the same fate if it tows the same line.

[Lorence.xD]

Russia and other countries always propose some laws, some of which can be pretty impactful, but until it has actually passed, it's just a proposal, and regarding Bitcoin, there has been countless proposals that remained proposals, so this might be just another one. Though there's no doubt that the Russian government is generally anti-crypto, it's just not clear yet how far they will go in terms of making things hard for crypto users.

At the very least they are trying their best to make a fair and just regulation that will benefit both sides. If the measure the Russian Government makes sure that money laundering will be possible then I think that it is a good thing after all. I too wouldn't want cryptocurrency to be associated with illicit activities, the only problem here is that there are a lot of cryptocurrency out there and I hope that the regulation covers them too

[sunsilk]

I've thought that they were not going this far and wouldn't be against to crypto. Hatshepsut's right. It's still a proposed law but there's a big chance that this will get the support of the law makers and will make it eventually to pass it as a law.

I honestly think that they're with crypto as with those videos I've watched where their finance ministry was in contact with Vitalik for some certain upgrades and partnerships. Or, I'm just too optimistic with that as I watch and thought that it's all about adoption.

[pooya87]

in any government in any country there are always some extremists in the different roles within government body that make extreme statements about everything (not just bitcoin). in 99% of the cases it is just their extremism and not what the country would pass as a law.

as for tax evasion, that's not new. the law existed before and will exist in the future too. anyone evading taxes is going to be heavily prosecuted and fined whether it is bitcoin related or not.

[cryptomaniac_xxx]

I've thought that they were not going this far and wouldn't be against to crypto. Hatshepsut's right. It's still a proposed law but there's a big chance that this will get the support of the law makers and will make it eventually to pass it as a law.

They are and will always will be against bitcoin and crypto in general.

I honestly think that they're with crypto as with those videos I've watched where their finance ministry was in contact with Vitalik for some certain upgrades and partnerships. Or, I'm just too optimistic with that as I watch and thought that it's all about adoption.

It doesn't matter, even Vitalik rubbing elbows with Putin before, Meeting with founder of Ethereum project Vitalik Buterin. And if you have been following every statement coming for the Russian government since 2017, they always contradict themselves in public.

[crwth]

I think the The issue would be on how much people living would be declaring. I know it will always depend on the amount they are holding. I'm not really up for that law because it could easily be transferred in another wallet and say they have nothing to do with it. Most of the people would probably just declare up to the limit or something.

[jrrsparkles]

Still someone can receive bitcoins without getting traced by using some strategies but if the tax amount is fair then we could pay the tax and enjoy the freedom of using cryptos with not much of worrying.

[AniviaBtc]

Russia and other countries always propose some laws, some of which can be pretty impactful, but until it has actually passed, it's just a proposal, and regarding Bitcoin, there has been countless proposals that remained proposals, so this might be just another one. Though there's no doubt that the Russian government is generally anti-crypto, it's just not clear yet how far they will go in terms of making things hard for crypto users.

With that laws towards bitcoin, I think Russia is really against it and they are doing anything just to make cryptocurrency illegal in their country.

If they are doing those things like that, it is pretty obvious that they are not that happy about cryptocurrency industry.

Bitcoin and any other cryptocurrency adoption is really hard to reach, it is not the people who are the problem, but the government and their mindset towards it.

[kryptqnick]

First of all, Russia is not exactly the country that puts forth policies which are then adopted in the Western world. So even if the project law becomes the law, I don't think it will affect significantly more countries, maybe just a couple of pro-Russian ones. Secondly, I don't think that this will become the law because I'm sure done members of the parliament enjoy having their cryptos undeclared and wouldn't want the transparency that the new legislation would involve.

[cheezcarls]

What if the declared crypto wallet was hacked or compromised? And was being used for unauthorized transfers to a chain of unknown wallets? How can the Russia government handle this situation? Will they keep the original wallet owner accountable despite it’s hacked? And of course, it’s hard for them to keep track because every person can create multiple wallet addresses and had many strategies to avoid government rules or something.

[DraGonD]

Sounds like not a regulation that everyone wants

[NotATether]

And what will be their legal definition of a "wallet"? If they define it to encompass web wallets, they still leave all software and hardware wallets unaccounted for. Definitions that seem intuitive to us are convoluted from a legal point of view.

Even if they classify it as all the common ways of making a wallet, i.e. exchange, web wallet, hardware wallet, software wallets with a wallet file, there are more exotic wallet types that don't exactly fit a legal definition of the word wallet such as storing all your bitcoin in a single private key.

Someone can also strore everything in different address or derivation paths in the same wallet file to exploit a loophole in this law to classify your holdings as just one wallet, so you pay one fee.

There's also wallet types like paper wallets and brainwallets that are nearly impossible to prove the legal existance of.

And what does the law dictate if you have a multisig wallet with someone outside of Russia? Will they classify it as yours, or a foriegner's wallet? Ditto for bitcoin stored in locktime transactions, can they classify it as yours although you can't spend it?

I doubt they will find legal answers to all these questions, so what's most likely going to happen is that Russians will still find a way to use bitcoin legally.

[AicecreaME]

Regulating bitcoin will always mean that you are bitter about it in whatever reason you have. Government will always try to shutdown Bitcoin because they wanted it yet they can't have it, and that's what infuriates them even more. The Economic problem arises when the pandemic starts and continue to happen, that's why the Governments are trying to do whatever they can to help it grow again.

Some Governments uses Bitcoin in order to do that, while Russia is the exact opposite of them.

[molsewid]

This proposed law helps the government to track crypto-currency user's in their country. If the Russian government entirely bans crypto, they will use this list to track who still use crypto.
But at least in this proposed law allows a crypto-currency in their country. Users need to submit corresponding support to the government, which is a pain to us crypto-user.

[dothebeats]

Russia is always proposing bills and laws like this and labeling it as something that could benefit the cryptospace, although in reality this is hurting crypto more in the region rather than helping it. They are clearly wanting to know which people hold how much for surveillance, and this has nothing to do with them trying to regulate the space since regulation can be done with or without those that they are asking on their citizens.

A lot of entities dealing with cryptocurrencies would surely go away from Russia and take their business elsewhere.

[buwaytress]

Well, this will only make people go even more underground, seek more privacy increasing options, go more P2P, and more decentralized alternatives. At the same time, it'll push developers into creating even more solutions, or bolster innovation work already ongoing. So, in the end, better for the ecosystem as a whole. Necessity is the mother of invention, after all.

[veznata]

of course one can not be traced but the problem is when people want to cash out. the good think is that you can spent your bitcoins in many countries (Europe and USA are crypto friendly). if it is all about evading taxes I think law is good. you must pay taxes whereever you live. at the end don't panic guys. nothing bad will happen. just live your life and hold your bitcoins a bit more time. this crypto revolution is one in a lifetime chance and it is not too late to get on board yet for those who feel sorry missing the early days.

[Shasha80]

The Russian government passed the new law just to ensure that it gets tax revenue from Bitcoin owners. In my opinion,
even though the law is only a proposal, it will not be long before it will actually be passed. But in my opinion there is no
need to panic for the Russian people, they just need to declare the cryptowallets they own and pay taxes according to the rules,
of course there will be no problem if the rules are not broken.

[AmoreJaz]

Russia and other countries always propose some laws, some of which can be pretty impactful, but until it has actually passed, it's just a proposal, and regarding Bitcoin, there has been countless proposals that remained proposals, so this might be just another one. Though there's no doubt that the Russian government is generally anti-crypto, it's just not clear yet how far they will go in terms of making things hard for crypto users.

yeah, lets talk about it when it is already a law. because a proposal can go a long way and may not be approved at all. right now, i dont think this is one of their priorities. we still have this pandemic, no vaccine yet, and talking about someone going to jail because of crypto holdings. i dont think thats gonna happen yet.
 but we can understand that governments want to take their share from this crypto business, and not only Russia is thinking about it. but this is a long journey for them, because it is hard to regulate crypto.

[Zionatin]

This will backfire. If you pay taxes in crypto then you can trace is and find how corrupt the government is when you see your crypto go into the pockets of the true criminals.



They legalizing and understand that Cannabis should be allowed to be consumed and used all over the world and now they want to go backwards with a bill like this? No one will take this seriously or sign it. It is a joke!
If people are becoming more understanding these days then what kinds of monster woulf agree to such laws.

What sort of demented psycho wants to put another person into a cage? Esspecially for something none voilent.

If you not paying tax on crypto guess what? The government can do nothing. You earning a currency made by the people there is nothing to pay tax on. There is no money laundering that would require money. THrey honestly such a bunch of idiots.

We living in a world where one human being wants to throw another human being into a cage for 3 fucking years for using crypto. Thats sick. The person making this bill needs serious help.

I want to see russian come do something about me dealing with Russian transactions. If I am running an exchange the can fuck right off. I would never give the personal info of my users no matter who asks. Arrest me!! 

Talking about evading taxes what about goverment curroption? How about we actually go full on crypto and pay tax in crypto and then the goverment must spend that crypto so it can be traced and fianlly our tax money will not be stolen since it can be tracked so please Russia bring this law in then we can expose your currupt government.

[ipanks]

It will not stop people by using crypto wallets on their devices. They will search for other crypto wallets that can fit them, and they don't have to worry about the ban, fined, or even go to jail. People will get their wallets, and they can hide their crypto assets in the other way. Besides that, people already have a hardware wallet that they can hide to the safe places, so they don't have to tell anyone they have crypto.

[Saisher]

Can they keep up and are they good on tracking wallets that have over $1200 on it, if I am a resident of Russia I will be aware of this and make a way not to track my wallets I can use mixer or go underground but I will make sure that I will not go over the limit of what is required of me so I can keep my account in good standing.

[lovesmayfamilis]

Today, Russian cryptocurrency laws change regularly and cryptocurrency holders should always keep an eye on the news. In the latest news, they write that the government is proposing to verify crypto wallets. Thus, according to the government, all cryptocurrencies should become fully centralized.
Legislators do not want to take into account all the fundamental cryptocurrency decentralization.
The fact that it is explained that there is a control of terrorism and money laundering, in fact, looks like the establishment of complete control over cryptocurrencies.

[bryant.coleman]

Once again, unsubstantiated rumors. A few days back there was a flood of threads here claiming that India is going to ban cryptocurrency. It continued, even after I posted here and clarified that no such law is scheduled to be discussed during the current parliament session (as per the documents released by the government of India). I have noticed a huge increase in the FUD levels during the last 1-2 months. Something fishy is definitely going on. Whales seems to be accumulating BTC, after manipulating the exchange rates. 

[bL4nkcode]

If this bill becomes a law in Russia or whatever country it follows, then more users will go seek more privacy, security online, alternatives where to buy/sell and using some decent DEX.

Developers, businesses and the community will find ways on how things will continue to work as what it is today so just chill.

[Yatsan]

The point is in there that the government of Russia wanted to ensure safety and secure that crypto is not being used as a tool for money laundering and other related illegal activities but surely once that law will be passed, people using crypto in Russia will most likely feel unsecured in a sense that they still do want no declaration of their crypto wallets for the sake of their own privacy as well as the assets they do hold into their crypto wallets.

But as for now it is still just a proposal so either way, there are still possibilities that this might not be passed as a new law due to some circumstances. Let's just get back in here once the news become true that the proposal become already a law. Although we are not all in Russia, we must be aware of such news for there might be certain instances that governments of other countries would adapt such law once it become successfully being implemented in Russia.

[ChiBitCTy]

Well this is certainly not very surprising coming from Putin, a straight up dictator.  Dictatorships often want to completely control everything and no surprise they want to have complete oversight of a currency that is hard for them to controls.  I could easily see other countries doing this. I could even see the United States doing this..all governments desire control and power over citizens..this is just another way to do that.

[Ozero]

Russia and other countries always propose some laws, some of which can be pretty impactful, but until it has actually passed, it's just a proposal, and regarding Bitcoin, there has been countless proposals that remained proposals, so this might be just another one. Though there's no doubt that the Russian government is generally anti-crypto, it's just not clear yet how far they will go in terms of making things hard for crypto users.

At the very least they are trying their best to make a fair and just regulation that will benefit both sides. If the measure the Russian Government makes sure that money laundering will be possible then I think that it is a good thing after all. I too wouldn't want cryptocurrency to be associated with illicit activities, the only problem here is that there are a lot of cryptocurrency out there and I hope that the regulation covers them too

Permission to have cryptocurrency, but not allow it to be used as a means of payment, do you consider it fair regulation? I consider this a mockery and mockery of my citizens. There are not many states in the world that are now introducing such severe restrictions on cryptocurrencies. This is done only by states where the rights of citizens are ignored. I am still surprised at such softness of criminal liability. I won't be surprised if the responsibility becomes even tougher.
On the other hand, how can you receive cryptocurrency, pay tax for it and still not use it as a means of payment?

[target]

Well this is certainly not very surprising coming from Putin, a straight up dictator.  Dictatorships often want to completely control everything and no surprise they want to have complete oversight of a currency that is hard for them to controls.  I could easily see other countries doing this. I could even see the United States doing this..all governments desire control and power over citizens..this is just another way to do that.

Its their law and thei country though. I wouldn't think this proposal actually would be signed.  This is even not a very tight law to grip the control since anyone of their citizen can create a wallet that nobody knew and only them can operate.  If Putin is a straight-up dictator he would have banned it all and force everyone to only  use the digital rubbles and then from that system they can monitor each of thier people's wealth.

Declaring wallets is not a good way actually, why don't they just monitor exchanges in their country like the yobit that up to this day isn't collecting KYC?

[pixie85]

Well, this will only make people go even more underground, seek more privacy increasing options, go more P2P, and more decentralized alternatives.

If this bill becomes a law in Russia or whatever country it follows, then more users will go seek more privacy, security online, alternatives where to buy/sell and using some decent DEX.

You guys managed to say the same thing there and I agree.

They won't achieve anything with this law because trading cryptocurrencies for fiat in Russia is already forbidden so nobody is going to leave a trace in the bank.

The only way to get crypto is to buy it with fiat money or get it as a payment for something and this is untraceable until you get caught in the act so trading bitcoin will become like trading drugs.

Holders aren't going to report what they have because they don't have to. People who get paid in bitcoin will have to go abroad to exchange because they can't do it in Russia anyway so they won't report anything or they will sell for cash on the street.

[BlackFor3st]

If the tax is not that high then it is not a problem in following this rules if in case the bill will likely to pass. Paying tax to our government is our
duty as a citizen because it will help the government to grow especially if the tax will be use correctly.

But I will wonder also if what will be the moves of the authorities if in case there will be some that will not follow the bill if in case it can pass because
I am sure that there should be people who are hard headed and will try his best to hide his crypto assets as much as possible.

[zasad@]

Again you wrote terribly about Russia 
Russians have already been intimidated by a complete ban on cryptocurrencies in 2017. Since that time, nothing has changed.
Previously, it was proposed to put in jail for 7 years for using cryptocurrency, but now only for corrective work for 3 years.
Not one foreign cryptocurrency exchange or exchanger will transfer data to the tax authorities of the Russian Federation.
I doubt that this bill will be adopted in this interpretation.

[Mahanton]

Im aint surprised with this one yet anytime there would be such news about regulation, laws blah blah blah about crypto holdings or wallets which should really be needed to be taxed.This isnt something new and had already anticipated.Yeah its a bad thing for those people whose involved into crypto into those countries but
if we do really think up clearly there are still viable options to take without getting traced nor tracked.Government is always been a fan on seeking or tracking outt everything in vicinity and they had been always like that.

Why would go to jail, if you can actually hide yourself? hehe

[buwaytress]

Holders aren't going to report what they have because they don't have to. People who get paid in bitcoin will have to go abroad to exchange because they can't do it in Russia anyway so they won't report anything or they will sell for cash on the street.

Not that Russians don't already have accounts all over the world -- and I'm not saying that as a bad thing, they just have Russian branches of banks all over former USSR, and it's not so difficult to, say, for example, sell Bitcoin P2P in Kazakhstan and have a local trader send X amount to your Sberbank branch, which then allows easily to send back rubles to your account in Russia. Bank might need to know their customer, but they don't need to know your customer's customer.