Wednesday, December 6, 2017

Russia proposing regulations to criminalize the creation of unregulated cryptocurrencies, but not their ownership

In an interesting proposal by a member of Russia's Finance Ministry on Dec 6, the Eurasian power is suggesting that regulators focus on criminalizing the creation and even mining of unregulated cryptocurrencies while at the same time withholding punishment from investors who simply buy, sell, or own these forms of digital money.

As the Russian government is working on laws to regulate virtual currencies, the country's finance ministry has proposed making their mining illegal. However, buying them will not be punishable. 
"The penalties will be different, mostly administrative, but if someone created the cryptocurrency for the purpose of settlements, then there will be a criminal punishment," said Deputy Finance Minister Aleksey Moiseev. 
Criminal penalties can also be applied to the creation of a financial pyramid or the issuance of a cryptocurrency to avoid tax, he said. The minister stressed buying bitcoin, and other cryptocurrencies would be legal. 
Moiseev added that work on the bill could drag on, as it includes many new words and concepts now absent in Russian legislation. 
At the moment, bitcoin mining and selling are not regulated by Russian law. President Vladimir Putin has ordered the government to create legislation governing the status of bitcoin, other cryptocurrencies, mining, initial coin offerings, as well as defining everything that relates to digital money by July 2018. 
The Ministry of Finance earlier suggested introducing mandatory registration of cryptocurrency miners and only to allow legal entities and individual entrepreneurs to participate. – Russia Today
Most governments are recognizing that trying to ban outright ownership of cryptocurrencies is a untenable and costly endeavor, but through regulation they can attempt to keep cryptos like Bitcoin from challenging sovereign and central bank authority over money.  Additionally, regulating new ICO's and the creation of cryptocurrencies as if they were securities is the only way possible to stop investors from high risk should they invest in the growing number of ponzi cryptos that are sprouting up in the financial landscape.


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