Opinion: Russian Finance Ministry amendments are set to boost the Bitcoin industry
The amendments by the Russian Ministry of Finance to the law ‘On Digital Financial Assets’ confirm that storing cryptocurrencies in wallets is legal, and their implementation will lead to the exit of unscrupulous players, said the CEO of the fintech company Aximetria, Alex Axelrod, in an interview with ForkLog.
‘Cryptocurrency services will have to adapt to the new requirements. Those who have invested in compliance systems will have no trouble doing so. By threatening punishment for non-declaration, the Ministry of Finance has effectively admitted that storing cryptocurrency is legal. This means that Russians will not have to rush to sell their bitcoins,’ he stressed.
In Axelrod’s view, the Ministry of Finance is following in the footsteps of the European Union, which adopted the EU’s Fifth Anti-Money Laundering Directive (5AMLD). As a result, a number of cryptocurrency companies, including the Deribit exchange, were forced to leave the EU jurisdiction.
‘This fully aligns with the global trend of bringing together the world of cryptocurrencies and traditional finance. Only legitimate crypto has the right to exist,’ the entrepreneur added.
Axelrod noted that those cryptocurrency exchanges that store clients’ funds in shared wallets (pool accounts) will face challenges. They will have to reform their accounting system to prove ownership of client funds through records on blockchains.
According to him, the introduction of KYC/AML procedures and clear taxation will make the market more attractive to institutional investors, who are accustomed to strict rules in traditional finance.
Not all members of the community share this view. The very notion of ‘dirty’ or ‘legitimate’ cryptocurrency provokes anger among those who view digital assets as money, possessing fungibility.
Some have rightly noted that stringent rules in traditional finance did not hinder the world’s largest international banks from laundering money for oligarchs and politicians from around the world (read more about the scandal around FinCEN documents at the link).
Other experts argue that the amendments use unclear terminology, and criticize the Ministry of Finance for trying to invent a unique approach.
‘The funniest thing is that we are trying to invent something of our own, while in much more successful countries everything has already been allowed and figured out. We’ve really tangled ourselves up,’ said lawyer Maria Agranovskaya in an interview for ForkLog.
Read detailed analyses of the law and expert opinions here, here and here.
As noted, on July 22 the State Duma passed the DFA law, on July 24 its approval by the Federation Council, and on July 31 Vladimir Putin signed it.
Read detailed analyses of the law and expert opinions here, here and here.
The Russian Finance Ministry proposed amendments in early September. ForkLog was the first to publish the document.
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