Posted 9 months ago | by Ben Armstrong

Newly Passed Crypto Amendment may Deter Russian Crypto Mining

The Russia Ministry of Finance recently released an amendment, placing an all-out ban on any type of income resulting from cryptocurrencies, according to a lengthy report by domestic news agency Izvestia.

The new amendment would practically allow the production of cryptocurrency through mining, but they will be “deprived of financial value”. This section has sparked different questions within the crypto community as many wonder how they will receive remunerations from farming.

Furthermore, the amendment also bans any transaction with crypto with a few exceptions.

The report states,

“...direct prohibition for individuals and individual entrepreneurs to perform any transactions with virtual money, with the exception of three situations. These include inheritance, the receipt of assets through bankruptcy and enforcement proceedings”

Big Losses for Russian Crypto Miners

The amendment dictates that violation of such will be treated as a criminal crime and will be charged up to around $1300 and seven years in prisons. In the case of businesses, they could be fined up to $13,000.

The report discloses that at its present stage, it is not very well understood by legislators and the amendment is yet to be finalized.

Furthermore many worries the move might pose as a handicap to the Russian economy. Partner at Padva and Epshtein Law Office, Anton Babenko said that such a ban would be unprofitable to Russia as it may lose on extra income tax.

Creative Crypto Uses May Result

The recent amendment seems to indicate that Russia might not be as progressive as we thought after Putin signed the bill that provides legitimacy to crypto back in July.

The restrictions that existed before prohibited cryptos from being a form of payment. But, the crypto community of Russia proves to be extremely resourceful and opportunistic by exploiting legal loopholes to issuing bank loans using cryptos.

By arguing that cryptos lie under the classification of “other property”, cryptos are able to be placed in escrow and to then secure the loan.

The legality of the project was murky at best and comes into speculations under the eyes of legal critics. But nonetheless, this was a creative attempt to circumvent Russian crypto regulations and as new laws came into power, we may be more intricate and creative loopholes being used by desperate miners.

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