Russia has signed into law legislation that impacts the cryptocurrency sector. On the last day of July, the Russian President, Vladimir Putin, signed the document that introduces a legal framework for digital assets that differentiates between digital securities and digital currencies. The statute, Federal Law No. 259-FZ, or “On Digital Financial Assets, Digital Currency and Amendments into Certain Statutes of the Russian Federation” goes into effect on January 1, 2021.
Crowdfund Insider received a note from the law firm of Buzko Legal, based in Moscow, explaining the new law. Roman Buzko, Managing Partner of the firm, says the issuance, record-keeping, promotion, and exchange of digital financial assets (or DFAs) is regulated in a very detailed manner. Digital currencies are bans the acceptance of cryptocurrency as consideration (legal tender) by Russian entities and Russian tax residents.
In brief, while digital currencies are not considered legal tender they are treated as property and will be regulated separately. Apparently there is a forthcoming regulatory statement providing more specifics. The law states that cryptocurrency may not be utilized as payment for goods and services – even while issuance and trading will be allowed.
The regulation of digital financial assets are more akin to what you would expect with securities. “DFA” are not necessarily issued nor exchanged via distributed ledgers, explains Buzko.
Issuing platforms must adhere to a regulatory framework and comply with record-keeping requirements as well as AML/KYC rules.
The Buzko explanatory document, available in English, may be downloaded here.