• Sat. Mar 2nd, 2024

Deadline Set for Russian Officials to Disclose Crypto Holdings

Dec 13, 2020

The Russian government has been working to establish regulations and bring about some order in the country’s crypto industry for the better part of 2020. Not only did the government focus on the obligations of firms and private individuals, but they have also come up with laws that stretch to government officeholders. Vladimir Putin, the Russian president officially amended the crypto guidelines of the country on Thursday called ‘On Digital Financial Assets’, which are aimed at compelling government officeholders to disclose their crypto holdings. According to the decree, the officials will be required to disclose information like the date of acquisition of digital assets, exactly what they own and how much. 

Apart from that, government officials will also be required to provide details about the assets’ country of registration and their issues. All parties who fall under this category can begin making their disclosure from January 1st, 2021 and they will be able to make this information known till June 30th, 2021. The decree also highlighted that not only will government officials be required to disclose the digital assets they won personally, but also those owned by their spouse and kids. It appears that this new effort is being made for ensuring complete transparency. The Prosecutor-General of the country, Igor Krasnov had first announced this back in October.

After a meeting in the Shanghai Cooperation Organization (SCO) of member states, Krasnov said that the move would ensure that crypto holdings of all civil servants are subjected to the same oversight measures, as their holdings of other traditional financial assets. Two years of precedent were upended by Krasnov’s ruling, after the labor ministry had declared that public officials wouldn’t be required to disclose their digital asset holdings. According to the Prosecutor-General, the previous ruling had been applicable when cryptocurrencies had not been regulated in the country. 

During this time, Krasnov’s office had claimed that they had seized crypto holdings of public officials that were valued at $440 million. In the traditional financial space, there has been a crackdown on corruption, so the government wants to make sure that public officials are unable to accept bribes in digital currency. Therefore, it was especially helpful that ratification was made to ‘On Digital Financial Assets’. While it is undoubtedly a significant development that government officials have to ensure compliance, Russia still seems to have the most stringent requirements for businesses and individuals.

Kommersant reported in September that criminal liability had been introduced by the Ministry of Finance for failing to declare their taxes on virtual currencies. According to the report, three-year prison terms had been proposed by the ministry, along with hard labor for those who don’t report annual crypto transactions that are worth more than a million Rubles ($13,000). Significant fines have also been imposed on smaller amounts. Hence, any legal or physical entity that doesn’t report an annual crypto income of 100,000 Rubles i.e. $1,300 will be subjected to a 30% fine of the total value of digital assets, up to a maximum of 50,000 Rubles. 

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