Russian Law “On Digital Financial Assets”, Echoes US Regulations

The group, comprised of Russian deputies, led by Anatoly Aksakov, the Chairman of the State Duma Committee on Financial Markets presented in the State Duma a draft federal law “On Cryptocurrencies and Initial Coin Offers” (ICO), according to the official release on the 20th of March.

In the release of press, which is in line with recent instructions issued by the Russian President Vladimir Putin, the documents “On Digital Financial Assets” and “On Alternative Fundraising Methods” were created, which stipulates that cryptocurrencies will be controlled by law up to July 1, 2018.

The draft law “On digital financial assets” was first presented on January 25 by the Russian Ministry of Finance. It defines cryptocurrencies and tokens as digital financial assets, allowing them to be traded only through authorized cryptocurrency exchange operators and establishing AML / CFT rules for ICOs.

The current version of the document recognizes digital assets as property, emphasizing that it is not legal tender in the Russian Federation.

According to financial expert Veselina Petkova, the current version of the draft law “On digital financial assets” has one key difference from the draft proposed by the Ministry of Finance in January.

The current version establishes “know your customer” rules for verifying the identity of users on sites providing cryptocurrency exchange services. According to Petkov, the new legislation will meet US requirements for cryptocurrency exchanges, as it will also require verification of customer accounts for anti-money laundering and anti-terrorism (AML / CFT) purposes.

On February 24, it became known that the data of nearly 13,000 Coinbase customers were transferred to the US Internal Revenue Service (IRS). On December 27, 2017, one of the largest cryptocurrency exchanges, Poloniex, announced that it would require confirmation of all user accounts of its platform.

The Russian bill proposes the following requirements for cryptocurrency exchange operators:

A digital wallet for the exchange of digital financial assets is opened by the operator only after passing the owner identification procedures in accordance with the Federal Law “On Combating Money Laundering and Terrorist Financing”.

The new version of the bill also has new aspects regarding ICOs. In contrast to the previously proposed RUB 50,000 (USD 900) as the maximum investment for unqualified investors, the bill now assumes that the maximum limit will be determined by the Central Bank of the Russian Federation (CBR).

In January, it was reported about disagreements between the Ministry of Finance and the Central Bank, which disagreed on whether cryptocurrency trading should be allowed. According to RIA Novosti, the differences were finally resolved, and now the Central Bank is responsible for the exchange of cryptocurrencies in the country.