The Russian Ministry of Finance has made new amendments to the country’s cryptocurrency regulations. The proposal outlines a new set of rules for cryptocurrency owners, exchanges and miners, as well as penalties for undeclared cryptocurrency transactions.

Russia’s new encryption regulations

Russian business newspaper RBC reported on Thursday that the Russian Ministry of Finance has proposed new amendments to the country’s laws on digital financial assets, which will take effect in January.

The proposal details that if the total transaction volume in a calendar year exceeds 600,000 rubles ($7,757), both individuals and organizations’ cryptocurrency owners will be required to report their crypto transactions and wallet balances to tax authorities. This is a major improvement of the Ministry’s proposal in September, which requires taxpayers with a total transaction volume of 100,000 rubles to report their transactions and holdings to the tax authorities. The deadline for the first report is April 30, 2022.

The new proposal also requires cryptocurrency exchanges and miners to provide information about their cryptocurrency transactions to the Federal Financial Supervisory Service Rosfinmonitoring.

The publication stated that failing to disclose data to tax authorities twice within three years or deliberately providing false information is a criminal offence. For taxpayers whose transactions were worth more than 45 million rubles or more in two of the past three years, the proposed penalties include a fine of 500,000 rubles to 2 million rubles, a maximum sentence of five years of hard labor, and imprisonment of less than 18 years. Months and three years. Penalties for unreported crypto transactions of smaller value include fines, forced labor, and shorter detention periods.

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After the announcement, the Ministry of Finance clarified that the regulations are necessary to prevent the illegal use of cryptocurrencies. “The use of digital currencies is increasing every year. This situation usually occurs not only for investment purposes, but also for money laundering.”

Russian Vladimir Putin signed a bill on digital financial assets into law in July, and the bill will take effect in January. It legalizes cryptocurrency, but prohibits its use for payment for goods and services. Russian Attorney General Igor Krasnov (Igor Krasnov) said that government officials must also declare whether they own any cryptocurrency. At the same time, Russia’s central bank, Bank of Russia, announced plans to establish and test the central bank’s digital currency, the digital ruble.

What do you think of Russian encryption laws and penalties? Let us know in the comments section below.

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