Cryptocurrency miners in Russia could go to jail if they don’t report income

Russia is now extremely tough on regulating cryptocurrency mining and trading, introducing draft legislation that imposes severe penalties for those who fail to report digital assets to the state. The latest bill threatens hefty fines and even jail time for those who organize illegal cryptocurrency transactions.

Under the bill, miners must report their income to tax authorities or face up to four years in prison. They will also be required to provide information on the unique string used to count digital currency transactions.

How high is the income from Russia?

The Ministry of Finance has proposed severe penalties for miners who evade digital asset declarations. Amendments to the penal code state that if a tax-evading miner declares income at least twice in three years, equivalent to more than 15 million rubles ($196,800), he faces up to two years in prison and a fine of up to 300,000 rubles ($3,940). ) and two years of hard labor. If the amount exceeds 45 million rubles ($590,000), the penalties are even more severe: up to 4 years in prison, up to 2 million rubles in fines, and up to 4 years of hard labor.

How high is the income from Russia?

The bill also provides two ways to sell cryptocurrencies for real money: on foreign cryptocurrency exchanges or on Russian websites under an experimental regulatory regime. In Russia, there will be a register that holds information that miners use to trade digital assets, whether they are banks or other legal entities. Any violation of the framework will be considered a violation punishable by up to seven years in prison, a fine of up to one million rubles and hard labor of up to five years.

For years, the Treasury Department has attempted to coordinate with other authorities to control the cryptocurrency market. In January, Deputy Minister Aleksey Moiseev said that the ministries had once again run into obstacles and could not agree on a bill on cryptocurrency mining to be submitted to the State Duma in November 2022.

Anatoly Aksakov, chairman of the Duma Committee on Financial Markets, shared the situation in December 2022, saying that the bill could open channels for withdrawals from the country. The Ministry of Finance has been ordered to finalize the mining bill, and in February 2023, Anton Gorelkin, deputy chairman of the State Duma Information Policy Committee, announced that “the bill will be deferred”. The meeting adopted the outline”.

Another bill under consideration by the State Duma provides for amendments to the tax code. Digital currency transactions of more than 600,000 rubles ($7,900) per year will require mandatory tax declarations.

The federal tax office will have the power to demand bank statements from individuals if the transaction involves the transfer of digital funds and appears to violate tax laws. The bill provides for lighter penalties for those who own cryptocurrencies but fail to report them to the tax authorities: a fine of 50,000 rubles ($650), and a penalty of 10 percent of the undeclared amount.

Russia plays a major role in the global cryptocurrency market, with citizens and businesses actively involved in mining and trading. Economic sanctions imposed by Western countries in response to the 2014 annexation of Crimea have fueled interest in cryptocurrencies in the country. The Russian government has been exploring ways to regulate the cryptocurrency industry for years, and the new draft legislation is the latest move in this area. its hard.

In short, the new draft law proposed by the Russian government aims to regulate the use of cryptocurrencies in the country and limit illegal activities related to them. While the law has been supported by several quarters, it has also been criticized for being too harsh and potentially stifling innovation in the crypto industry. As the world continues to grapple with the natural evolution of cryptocurrencies, it remains to be seen how effective the new law will be in achieving its goals.

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