The draft code of administrative violations introduced to the Russian Parliament still implies penalty for “money surrogates”. However, bitcoin seems to be excluded from that definition.

The new law was dreaded by Russian bitcoiners. However, instead of banning bitcoins, some Russian legislators on 18 December 2015 seemed keen to de-criminalise them totally.

The clause 30.38 of the new draft code introduced by five members of the State Duma proposes penalties for issuing “money surrogates” – up to 100,000 rubles ($1400) for physical persons and up to 5 mln roubles ($70,000) for legal entities. Use of “money surrogates” is penalised by the clause 30.39 with a maximum fine of 3 mln roubles ($42,000) for illegal purchase or sale of “money surrogates” for Russian rubles.

However, the definition of “money surrogates” clearly specifies that the law concerns only those issued within the Russian Federation. This means that a bitcoin, if mined outside Russia, is definitely excluded from that category. The draft law also exempts from the definition “any digital money” compliant to the laws of CIS countries, the EU and UK, meaning that a currency legal in one of those jurisdictions is not banned in Russia.

Furthermore, in the event that bitcoin is recognised a “money surrogate”, one can still use it if personal data is disclosed (which is similar to the KYC rule enforced by BitLicense) or if the person bought “money surrogate” just once as a souvenir.

The first draft of the bill on “money surrogates” was introduced by the Russian Ministry of Finance in the second half of 2014. The text of the bill was found problematic because the term lacked clear definition. The Ministry had to call the bill back and introduce a new version. Last spring the regulator promised that the bill banning “money surrogates” will be signed into law by the end of this year. However, the situation has changed over the summer. The Central Bank of Russia became much more favourable towards cryptocurrencies and Russian president Vladimir Putin admitted that digital currencies could be used for "some operations". German Gref, President of Russia’s largest bank Sberbank, shared with the audience that he had some bitcoins in his personal possession.

However, the opposite trend was also noticeable. In September Russian media reported that a new draft law proposed by the Ministry of Finance would sentence those who “make money surrogates, buy them with a goal of resale or sell them” to correctional works. In October it was rumoured that a new legislative proposal imposed penalties of up to  four years in jail on those who would mine or use bitcoins. Earlier in December a spokesperson for the Ministry of Finance told CoinFox that the primary concern of the regulator was exchange operations between cryptocurrencies and the national currency ruble.


Alexey Tereshchenko