Deputy Minister of Finance confirms that the draft law criminalising circulation of bitcoin in Russia will be passed to the State Duma during the current session. This sets the deadline as 6 August.

After more than a year of discussions, consultations and sporadic media hype the draft prohibiting cryptocurrencies seems to be on its way to the lower chamber of the Russian Parliament. 

“I hope we will manage to do this in a reasonably short period of time. I believe, we will be able to bring it in before the end of the spring session, but I don’t know if it will be passed in a first reading,” said Deputy Minister of Finance Alexey Moiseev as quoted by RIA Novosti.

The official emphasised that the primary target of the law is exchange operations between cryptocurrencies and the ruble, which will be classified among other illegal currency operations. So far with every new iteration of the draft, the ministry has been increasing proposed penalties for issuance and exchange of “surrogate money”. The final version offered for public discussion suggests particularly heavy penalties for top executives of banks involved in the crime: up to 7 years in jail with deprivation of right to hold specific posts or fines of up to 2,5 million rubles. The main reason for this, as in many similar cases, is alleged connection between cryptocurrencies and financing of terrorism. The senior management of financial institutions bears, according to the Ministry, a special responsibility in the fight against criminal financing activities,

“…Because things like these are very difficult to carry out on a large scale without aid from banks’ senior executives. After all, the banking system is the principal element and the front line in our fight against terrorism laundering [sic! - CF],” Moiseev declared.

This is not the first time Russian Ministry of Finance makes a broad statement about the proposed prohibition of bitcoin and other unofficial money systems. The initial work on the draft law began as early as in August 2014. About this date in March last year the deputy minister promised to introduce the ban before the end of 2015. Over the summer, however, after a series of ambiguous statements from Vladimir Putin and other top state officials, it was assumed by many that the government was taking a softer stance towards cryptocurrencies. However, the new offensive began in September, this time with an explicit aim to create criminal liability for those using bitcoin.

 Svetlana Nosova