Russia’s complicated and ambiguous stance on cryptocurrencies finally appears to be coming to an end with new legislation that appears now to underpin a favourable attitude to the emerging phenomenon.
In recent months, anything had seemed possible with rumours ranging from an outright ban on all cryptocurrency activity to an audacious play to become the world’s leading cryptocurrency mining hub.
As reported in December, the Russian Finance Ministry had been tasked with preparing legislation on all aspects of cryptocurrencies, including ICOs.
After discussion and amendment, the draft legislation has finally been released. In order to be taken into law it will need to pass both the Russian Duma and Federation Council legislatures over the next few months.
For ICOs there will be requirements for both the company that wishes to launch a coin offering and for the investors who want to participate.
Regulations for ICOs
In order to issue an ICO, a company will need to disclose certain information in an investment memorandum. This includes the project’s website, network provider and full name of the person ultimately responsible for the offering.
While these restrictions appear relatively minor, the legislation also makes provision for taxing digital assets “prior to commencing their commercial use.”
There will also be strict limits imposed on promotion and advertising. According to the bill, before any ICO, “tokens that are issued may not be offered to potential purchasers in any form or by any means using advertising.”
Regulations for Investors
Russian securities law distinguishes between the licensed professionals and the average Ivan. For the former there will be no investment limits but Ivan will be restricted to an investment limit of 50,000 rubles (around $900) per ICO.
Overall the legislation appears relatively sensible and considered. They have decided to go with regulation rather than a ban, believing that trying to put a lid on crypto-activity would lead to a black market: unregulated, and no less importantly, untaxed.