Russia, a country still struggling with various aspects of cryptocurrency regulation, could soften its stance on the asset class, as recent events indicate.
The court ruling is clear
A court in Yekaterinburg, Russia's fourth largest city, the Sverdlovsk Regional Court, yesterday ordered Sberbank to unblock the account of one of its clients whose account was blocked for Bitcoin trading.
Pavel Revdinets, a Bitcoin trader, saw his accounts and cards blocked for being involved in money laundering after the bank noticed what they considered unusual transactions. Sberbank also asked Pavel R. to submit documents explaining the source of the funds and the significance of the ongoing operations.
The client provided all the necessary documents, explaining to the bank that the unusual transactions were Bitcoin trades. Since his accounts were not reopened after his compliance, he proceeded to file a lawsuit against the bank. The initial case in which he filed a lawsuit in the Revdinsky City Court against Sberbank to unblock his bank cards, accounts, resume remote banking and compensate for non-pecuniary damage was dismissed by the court.
However, his efforts to challenge the sentence paid off as the TAR, having re-evaluated the case, overturned the previous sentence in his favor, ordering the bank to unblock bank cards, restore access to remote banking services and compensate him with his legal costs as his explanations fulfilled the required legal obligations.
A victory that applies to everyone
It is a win for the cryptocurrency which is addressing regulatory uncertainty in the country. In particular, current Russian regulations do not recognize Bitcoin and other cryptocurrencies as a form of payment and prevent public employees in sensitive positions from owning them as the country has serious concerns about the use of cryptocurrencies in money laundering.
Having given cryptocurrencies legal status since 2020 but not accepting them as legal tender, the country has moved to define cryptocurrencies in proposed legislation. The bill, proposed in mid-November by the Ministry of Finance, contains provisions that would regulate the circulation and possession of cryptocurrencies and would define responsibilities for violating the rules established by the bill.
It also requires citizens, individuals and legal entities operating in the Russian Federation to declare their holdings in cryptocurrency and establish tax liability for failing to disclose information or reporting false information on cryptocurrency transactions. It also provides for the recognition of cryptocurrency as an "asset" and establishes its taxation accordingly. It is proposed to enter into force in April 2022.
While the bill is still under consideration, it remains to be seen whether it will ultimately benefit cryptocurrency traders or not. However, clearer regulations could loosen those currently restrictive in the country, allowing more freedom for cryptocurrency investors.