On May 21, the Russian State Duma proposed a bill to punish illegal cryptocurrency activity with up to seven years of prison or 5 years of hard labour, according to reports from Russian media outlet, RBC. In what would be the strictest approach to cryptocurrencies yet, the punishment is also accompanied by a 2 million Rubles fine, which amounts to about $28,000.
The proposed changes have not been approved yet, having only transferred the documents to the Ministry of Economic Development. The report states that a violation of the various new rules would result in appropriate punishments. The report talks of how lawmakers have been preparing regulation for years,
[Since 2018] he [sic] has been preparing for the second reading. By the end of 2021, the Ministry of Internal Affairs, together with other departments, should develop a mechanism for the arrest of cryptocurrencies and other virtual assets.
For example, if commercial transactions are made with cryptocurrency, an individual can be fined from anywhere between $278 to $2780. The larger the entity, the larger the punishment - but “especially large damage or extra large income” affecting “citizens, organizations or the state” could result in forced labor of 5 years or seven years of imprisonment.
It is proposed to punish with forced labor up to five years or imprisonment up to seven years with a fine of up to 1 million rubles for especially large damage or extra large income. or in the amount of the convicted person’s income for a period of up to five years.
Though the proposal does state “illegal” cryptocurrency use, it does not elaborate in great detail on what illegal cryptocurrency uses may be. Russia, like many other countries, has been examining the potential of a Central Bank Digital Currencies (CBDCs). Iran, meanwhile, has seen leader Rouhani urge officials to form new regulation on mining.
The benefits of the technology are certainly clear, which is why the World Economic Forum (WEF) has pushed for its adoption. Russia’s consideration of imprisonment and hard labor would make it the most draconian of countries when it comes to regulation, but the bill is still some ways away from approval. Similar proposals have been made in other countries, only for a final change to more lenient rules.