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

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[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.