The latest Russian draft law still contains important bans for the crypto sector

The latest Russian draft law still contains important bans for the crypto sector - shutterstock 648198472The Russian Ministry of Finance has drafted a new bill that echoes a previous attempt to ban the use of cryptocurrencies and, if approved, would have a major impact on the nation's cryptocurrency miners.

The document, sent by the ministry to other branches of government for feedback, says miners located in Russia and using Russian-based infrastructure may not be able to collect rewards for their work, according to the Russian newspaper Izvestia, which first brought back the bill. The draft intends to amend the digital assets law signed by Russian President Vladimir Putin at the end of July.

A heavy blow for the miners

If the bill passes as it is written, it could push individual miners to act outside of lawful operations, says Igor Runets, CEO of BitRiver, one of the largest mining farms in Russia.

“They receive cryptocurrencies as a reward [for recording transactions on the blockchain], and that would become illegal,” Runets said. One way miners and companies could apply to get around this problem would be to turn to a foreign entity through which to conduct their finances, Runets speculated.

However, such a process is not cheap and would not be an option for small miners who could not afford the legal costs. The bill states that "actions that allow third parties to use the digital currency, the creation of software and hardware for issuing the digital currency and transactions with it in computer systems created by foreign laws," are not prohibited. ".

However, accepting digital assets as payment for such work would be illegal. The new rules could affect facilities in Russia that house third-party customer mining devices that are paid in cryptocurrency for the electricity and services they provide.

According to Jakhon Khabilov, head of the Sigmapool mining pool, currently only the smaller mines in Russia accept cryptocurrencies as payment, while the larger ones are paid in fiat currency via bank transfers.

The threat of prison

The bill includes the provisions of an earlier draft, already introduced in the Russian parliament but abandoned after a public outcry. Both claim that Russian citizens can only own crypto assets if they inherit them, if they receive them as a debtor of a bankrupt company or as compensation after winning a lawsuit.

The new draft also carries the proposal that the illegal issuing and use of cryptocurrency and acceptance as a means of payment should be punished with fines of up to 1 million Russian rubles (approximately 11.173 euros) or up to seven years in prison. - we don't even dare imagine what happens if you try to buy Bitcoins.

These measures were introduced in May, but have generated strong criticism from the Russian crypto community, as well as the country's Ministry of Justice and Ministry of Economic Development. The draft did not become part of the law signed by Putin in July.