Russia's Interior Ministry Proposes Criminalizing Unregistered Crypto Activity, Says Report

Russia's Ministry of Internal Affairs is reportedly considering establishing criminal liability for unregistered crypto operations, local media outlet Izvestia reported August 23.

According to documents acquired by Izvestia, the interior ministry of Russia is developing an amendment of legislation that concerns legalizing only registered operations with open source cryptocurrencies such as Bitcoin, Ethereum, and others.

The ministry has suggested that in order to conduct legal transactions in crypto, persons or entities should acquire a "Mandatory registration with state authorities conducting financial and tax regulation."

The initiative is reportedly coming from the Russia's interior ministry's Main Directorate for Drugs Control.

On July 13, head of the GUKON Andrey Khrapov requested that Russia's Ministry of Finance express their stance on the potential realization and feasibility of the proposed legislative measures, Izvestia reports.

Russia's Ministry of Economic Development has reportedly expressed a sceptical stance on the interior ministry's initiative, claiming that it is "Still early" to consider the criminalization of cryptocurrency operations.

The deputy chief of the Ministry of Economic Development Savva Shipov pointed out that as yet there is no legislation referring specifically to regulating crypto transactions.

Tolkachev also noted that while crypto trading "Has been in a so called 'grey zone' in Russia," and a number of Russian authorities have been raising similar initiatives since 2015, the idea of criminalizing crypto trading had yet "No direct legal ground."

The Ministry of Finance first introduced a full regulatory framework for crypto and blockchain in January, 2018.

While the recently approved version of the bill legalizes activity around crypto and Initial Coin Offerings in general, it still directly determines that digital financial assets "Do not constitute a legal method of payment within the territory of the Russian Federation."