Russia Lost $300 Million Due to Insufficient ICO Regulation

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The Russian presidential adviser on Internet development, Herman Klimenko, has revealed that his country has lost approximately 18 billion rubles (roughly $310 million) due to a lack of ICO regulation so far this year, Tass reported on Thursday.

The estimate came from the Russian Association of Blockchain and Cryptocurrency (Rabik). Klimenko announced the formation of this association back in August. It was created to unite participants in the cryptocurrency and blockchain space, including miners and investors. Klimenko detailed:

Rabik has estimated the loss to the Russian economy from the absence of legislative regulation of ICOs since early 2017 at 18 billion rubles, and 3.5 billion rubles have not been received to the federal budget since the beginning of the year as tax revenues.

He explained that these calculations are based on ICOs conducted by Russian residents in foreign jurisdictions between January and October. “This money would be enough, for example, for new parking lots and tow trucks in Moscow,” he noted.

Lack of Regulatory Directives for ICOs

Cryptocurrencies and ICOs are currently not regulated in Russia. Last month, President Vladimir Putin held a meeting to discuss this topic. He subsequently ordered the prime minister and the central bank to finalize the regulatory framework for cryptocurrencies and ICOs by July 1 of next year.

While the central bank has warned about the risks of ICOs, First Deputy Prime Minister Igor Shuvalov has stated that regulations will not kill token sales in Russia.

It is estimated that approximately $2.3 billion has been raised in ICOs globally to date, most of which took place in the first half of this year. Rabik estimated that Russian companies have collected $293 million in token sales this year, which is more than double the $128 million of venture investments in the country last year, Innov reported.

According to Rusbase news outlet, the largest ICO in Russia is a project by Internet Ombudsman, Dmitry Marinichev. The ICO of his Russian Miner Coin (RMC) project collected $43.2 million, the publication revealed, adding that another project called the Polybius digital bank collected $31 million and became one of the top five ICOs in Russia.

What do you think of Russia losing 18 billion rubles due to a lack of ICO regulation? Do you think Russia can do anything about it? Let us know in the comments section below.


Photo: Reuters