Russia Steps up Crypto Regulation Efforts

Nikita Blows · December 7, 2017 · 12:30 pm

Russia seems to taking their self-imposed responsibility of regulating crypto a step further. Even though it will still be legal to buy cryptocurrencies in the country, mining them could be a whole different story.

The rise and rise (and rise) of Bitcoin is a cause for celebration for crypto enthusiasts and a bone of contention for cynics. As it’s popularity grows, more and more people are interested in the financial benefits that the digital currency has to offer. It’s broken through the $14k barrier, and if that wasn’t enough, smashed through the $16k ceiling as well!

Energy and Mining

With its popularity, comes a stronger interest in government regulation. Based on this, and according to RT News, Russia’s finance ministry has plans to criminalize crypto mining.

According to Aleksey Moiseev, Russia’s Deputy Finance Minister:

The penalties will be different, mostly administrative, but if someone created the cryptocurrency for the purpose of settlements, then there will be a criminal punishment.

New Legislation Could Delay Implementation

Moiseev also added that it would also be illegal to use crypto to create a financial pyramid or to avoid paying taxes. However, buying cryptocurrencies, including Bitcoin, would still be legal.

Even though this is a proposed new development in crypto regulation, it might be a while before it’s actually implemented. Because crypto can encompass many facets of our technologically advancing world, the actual legal definitions are not settled. This means that the wording and concepts associated with it need to be understood before new legislation can be written.

Deadline Set for 2018

Because of this, there are no current regulations applicable to Bitcoin mining and selling. However, Russian President Vladimir Putin has proclaimed July 2018 as the deadline for providing definitive and comprehensive legislation for everything related to virtual currency, including ICOs.

Vladimir Putin

The country’s finance ministry has previously proposed that crypto miners need to be legally registered. The ministry added that only legal entities and registered individuals would be able to participate in any mining activities.

On the flip side of the virtual coin, Russian crypto enthusiasts have suggested creating a whole new city, whose sole aim will be to mine crypto. In addition, some of Russia’s wealthiest businessmen are investing in crypto ventures. Russian ICOs also raised over $300 million in revenue over the last year.

More Regulations Aren’t the End of Crypto

Malaysia has also recently announced that they too have plans to impose crypto regulations in a bid to prevent criminal activities related to using crypto.

Bitcoin’s continuous price surges do have the potential to introduce stronger regulations, but according to hedge fund guru and Bitcoin advocate, Michael Novogratz, it won’t result in the crypto industry shutting down.

What do you think about the increase in proposed crypto regulations? Do you think it will make a difference in the popularity and price of these virtual currencies? Let us know in the comments below!

Images courtesy of Bitcoinist archives and Pixabay.

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