|   Digital Currency


  |   Digital Currency


'Bitcoin is legal', says Russian Federal Tax Service

The Federal Tax Service of the Russian Federation released a document last week describing the status of digital currency such as bitcoin in the country.

According to the document, it is legal to own and use digital currencies in the Russian Federation, DCE Brief reported. It said that virtual currencies are viewed as ‘foreign’ currencies, adding that transactions involving such currencies are considered as monetary transactions. Also, under Russia’s current monetary control system, such transactions are not subject to financial reporting in any form.

Artem Tolkachev, director at Deloitte for legal services for technology and head of the Russian Blockchain Community, shared a summary of the document in a Facebook post. He said (translated by Coinfox):

“the law of the Russian Federation does not contain definitions of surrogate money, cryptocurrency or virtual currency;

there is no legal prohibition of transactions using cryptocurrencies for Russian citizens and organisations;

using cryptocurrencies in transactions may constitute grounds for regarding such transactions as means of money laundering and financing of terrorism;

according to the Tax Service, buying or selling cryptocurrencies with the use of foreign or domestic currencies and securities are defined as foreign currency transactions;

the existing currency control system does not oblige residents and non-residents to report cryptocurrency transactions to currency control authorities.”

Russian lawmakers had been pushing to criminalize the use of digital currencies such as bitcoin for quite some time. They even proposed a bill not only prohibiting the production and turnover of cryptocurrency in the country but also proposed higher fines and jail sentences up to seven years. However, Russian authorities gradually decided to abandon the idea to introduce criminal liability for the manufacture and use of money surrogates.

NewsBTC reported that digital currency is deemed foreign currency in Russia since August 2016. However, the transactions that are suspected of money laundering activities will be reported to the Russian tax authorities, who can launch an official investigation.

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